Enthused by the upturn in the economy, the Reserve Bank of India [Get Quote] on Tuesday revised upwards growth projections to 7.5-8 per cent.

In the third quarter review of the monetary policy on Monday, the central bank said the pick up in the economy was due to increased agriculture output and the growth momentum in industrial and services sector.

It has retained inflation estimates in the range of 5-5.5 per cent.

• The Monetary and Credit Policy 2005-2006

The central bank projected an expansion in money supply (M3) to be significantly higher than the earlier projection of 14.5 per cent in the annual policy statement of April 29, 2005.

Growth in the aggregate deposits would also be sizeably higher than projected earlier, it stated.

The non-food bank credit including investments in bonds/debentures/shares of public sector undertakings and private corporate sector, CP and others, is expected to be higher than 19 per cent, projected earlier.

The central bank stated that it was necessary to take careful note of the potential upward bias in monetary and credit aggregates for 2005-06 even while ensuring appropriate liquidity to sustain the growth momentum.