"We should end this financial year with a rate of growth which should be 6.5per cent-plus," said Sinha, who was addressing an annual meeting with thecountry's top financial journalists. "I had been talking about a 7 per centrate of growth. My feeling after six months is that we should have a rate ofgrowth which is 6.5-7.0 per cent," the minister said.

Sinha said that the fiscal situation was difficult but he did not mean tocreate panic. "The fiscal situation as a trend is difficult but there isnothing this year that is extraordinary," he said. Outside agencies wereless sanguine.

US rating agency Standard & Poor's (S&P) said on Tuesday India needed tocheck the trend of rising fiscal deficits and warned that failure to do socould affect the country's credit rating, which is already down at junk bondstatus.

S&P Said the combined deficit of the National and state governments and lossmaking public sector units could exceed 9 per cent of GDP this year- againstaround 8 per cent in 1998-and prescribed large-scale privatisation, alongwith fiscal, legal and regulatory reform.

The government aims to rein in the central fiscal deficitat 4 per cent ofGDP in 1999/2000, down from 4.5 per cent the previous year.

Economists doubt its ability to stick to the target because of unanticipatedexpenditure incurred on account of a 10-week clash earlier this year witharmed intruders in the Kargil heights in Kashmir, combined with expensestowards a general election in September and October.

The costs of rehabilitating millions of homeless people andrebuildinginfrastructure in the eastern state of Orissa, ravaged by a severe cyclonein late October, is expected to dent fiscal calculations further.

The finance minister reeled off figures of government spending on defence,food and fertiliser subsidies, pensions and interest payments and said someof these including defence were likely go up.

"I am not an accountant by profession but these figuresstrike me in the facewhen I look at them," he told the journalists.

Sinha said revenue expenditure on items such as wages,subsidies and interestrepayments had been slightly trimmed in the past year, but there was comfortin the fact that longer-term capital expenditure had marked a small risethis year.

Growth in agricultural output and exports and a worldeconomy on the reboundwould help India, the Minister said.

Sinha said he expected agricultural output to grow againthis year despitethe cyclone which devastated crops in Orissa.