Contrary to government's claim that 8.0 per cent economic growth could be sustained, credit rating agency ICRA on Tuesday pegged GDP growth at 6.4 per cent for this fiscal.

However, it expressed optimism that GDP growth can rise to 7-7.5 per cent in subsequent years if the new government adopts good policies and implements them efficiently.

"It is sorely tempting for government to seize upon the good news of 2003-04 and try to argue that 8.0 per cent is a sustainable rate of growth and that India now stands on this trajectory. But that is patently far from being the case," ICRA said in its report 'Money & Finance' released on Tuesday.

Assuming a good monsoon this year along with robust growth in industry and services sectors, ICRA said "even then, we still would not get GDP growth in excess of 6.4 per cent."

"This is the combined impact of 1.7 per cent growth in agriculture and 7.8 per cent in non-agriculture (industry and services sectors)," ICRA said.

The rating agency expects manufacturing to grow by 7.0 per cent and construction activities by 9.0 per cent with services continuing to post over 8.0 per cent growth in 2004-05.

"If good policies are adopted by the new government and efficiently implemented, it is possible in a few years that the underlying achievable growth in non-agriculture sectors may be pushed up beyond 8-8.5 per cent," ICRA said.

Given that agriculture is unlikely to grow in excess of 2.0 per cent, the result would be an overall economic growth of a little over 7.0 per cent, it added.

ICRA's projection assumes importance in the light of Finance Minister Jaswant Singh's claim that economic growth of over 8.0 per cent was sustainable in the coming years.

The Central Statistical Organisation estimated GDP growth at 8.1 per cent for this fiscal, backed by a 9.1 per cent growth in agriculture, 6.5 per cent in industry and 8.4 per cent in services.

After posting 5.7 per cent and 8.4 per cent growth in the first two quarters, the country logged 10.4 per cent growth in the third quarter of 2003-04.