The agriculture sector is likely to grow at 3.8 per cent from 3.4 per cent projected earlier. The factors that have led to higher growth are exogenous - better price conditions for agricultural products for this year, it added.

While in the services sector, telecom and financial sectors have continued their growth momentum during the period April-August 2007. "Although the incremental flow of bank credit to the commercial sector declined during the period, deposits have increased at over 10 per cent," NCAER said.

In case of industry, although the investment climate continues to be strong, the slower growth of exports may be a dampening factor, the Delhi-based research organisation said in its Quarterly Review but retained the growth in industrial sector unchanged at 9 per cent.

Among the positive factors listed by NCAER are - inflation rate is slightly lower than during the previous year, some easing of interest rates toward the end of first half of the current year, and strong inflows of external capital in the form of portfolio funds.

But among the negatives, the factors are slower growth of bank credit to the commercial sector, hardening of petroleum prices in the international markets and slower growth in exports, especially in rupee value, which determines the profitability of exporters.

The fiscal deficit of the Centre has also been projected slightly higher at 3.3 per cent of GDP from 3.2 per cent.