BRIAN JACKSON, STRATEGIST, ROYAL BANK OF CANADA, HONG KONG

RBI governor Subbarao has strongly hinted that the central bank will take a break from raising policy rates for the next one or two months, but the strong growth numbers may change his mind. Inflation is still the number one policy focus, and we continue to expect more rate hikes in the months ahead, perhaps as soon as the next meeting in December

DK JOSHI, PRINICIPAL ECONOMIST, CRISIL, MUMBAI

Overall the economy seems to be in good shape, though the next two quarters will see a moderation from these levels. This growth is taking place despite the central bank withdrawing the easy monetary stance, in spite of the fiscal authorities also taking away part of the fiscal stimulus. Policy decisions will be based on inflation, what happens to the global scenario. If inflation remains stubborn ? right now it is showing signs of levelling off ? if it remains stubborn then RBI could still tighten, because the demand is there. But one should also note that manufacturing sector growth is slowing down, so I think they have to do a balancing act, and global recovery I also think is still fragile

SAUGATA BHATTACHARYA, ECONOMIST, AXIS BANK, MUMBAI

Growth not too far off from expectations and is unlikely to cause a significant rethink for monetary policy stance without greater clarity about the effects of new WPI deflators on the growth rates. Need to check the consumption investment numbers to understand the source of growth, short of the statistical effects

ANJALI VARMA, ECONOMIST, MF GLOBAL, MUMBAI

It is higher than my expectations but I don?t think this number will prompt any action from RBI as even with these numbers the full-year growth should be around 8.5%, which is what the central bank has already factored in. Unless the full-year growth looks likely to cross 9%, the central bank is unlikely to get aggressive again in raising rates. I do not expect any more rate hikes in this fiscal year. We also have to look at how industrial production fares going ahead, as that has started slowing down only now

ANANTH NARAYAN G, HEAD OF FIXED INCOME, CURRENCIES, COMMODITIES FOR SOUTH ASIA AT STANCHART BANK, MUMBAI

The number is very strong. But headline inflation expected to be soft in December and January due to the base effect. Liquidity condition has already tightened further which is effectively more policy tightening. However, underlying inflation pressures remain strong due to high oil prices and now with the strong GDP data, RBI can be more bearish in its statement between now and December

DEEPALI BHARGAVA, ECONOMIST, ING VYSYA BANK, MUMBAI

Extremely bullish growth numbers across-the-board, especially construction. For the year, we are likely to exceed the targeted 8.5% growth. We stick with our call of 25 basis point hike in Q1 2011.

ARUN KEJRIWAL, EQUITY STRATEGIST, KRIS, MUMBAI

These are good numbers. If we did not have the tensions due to the scams, this kind of number would have pushed up the market by 100 points at least, but now we seem to be stuck at 50-60 points

RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI

This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5% for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee. From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverse repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR hike in the fourth quarter

SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES

GDP is significantly higher than our expectation. Good numbers from services? sector coupled with a rebound in the agriculture sector has resulted in a higher GDP number. Considering the liquidity shortage in the banking system we expect Reserve Bank of India to hold the key rates steady for the remaining part of fiscal 2010-11. We see GDP number at 7.3% by March end

JOYDEEP SEN, SR VP (FIXED INCOME), BNP PARIBAS WEALTH MANAGEMENT

Although higher July-September growth data gives RBI scope to hike rates, there would not be any immediate change in the central bank?s rate outlook because things are still not so good on the Index of Industrial Production. RBI would maintain rates at its December policy review as inflation is expected to ease now due to favourable base effect

SUNIL SINHA, HEAD ECONOMIST, CRISIL

Our call for the July-September quarter was 8.4% and to that extent it (8.9%) has surpassed our expectations. Given the 8.9% growth in April-June and 8.9% growth now, we expect the GDP to top 8.2% for the year-end (2010-11). Depending on the industrial data (Index of Industrial Production), RBI could hike the repo rate by 25 bps in FY11

ARUN SINGH, SENIOR ECONOMIST, DUN & BRADSTREET INFORMATION SERVICES

The GDP number is a surprising number. RBI will hold rates at its December 16 policy, as the growth data is till September and the current quarter is very critical. But repo and reverse repo rates will be upped maximum by 25 basis points at the central bank?s January policy review. We also expect RBI to increase cash reserve ratio by 50 bps in January

TOSHI JAIN, ECONOMIST, IDBI GILTS

The GDP number is far better than expected and manufacturing data, which showed an unexpected number, was positive and vibrant. Yearly GDP forecast would now have to be upped given this higher number. RBI will hold rates at its Dec 16 policy, but the GDP number would have a positive impact on its rate stance when it meets in January

DEEPALI BHARGAVA, ECONOMIST, ING VYSYA BANK

GDP number for July-September quarter (8.9%) has come out to be very bullish across all segments. We see GDP number at 8.5% by the year end (2010-11 April-March). We don?t think that rate pause which RBI hinted will stay for a long. We see a 25 bps (basis points) hike in repo and reverse repo rates in the first quarter of 2011

ANUBHUTI SAHAY, ECONOMIST, STANDARD CHARTERED

Agriculture and services sector has performed better than our expectation. Growth momentum is good in India highlighting that role of the government expenditure is important on both demand and supply side. We expect RBI to hold the key rates steady for the remaining part of fiscal 2010-11 as inflation may cool-off to the central bank?s comfort zone of 5.5%. We expect RBI to tighten rates in the second half of financial year 2011-2012

BACKGROUND

* India?s economy is largely driven by domestic demand and is expected to grow 8.5%t in the current fiscal year to end March

* Farm output should be better on near normal monsoon rains while industrial production in September rose at a much slower-than-expected 4.4% from a year earlier, lower than the previous month?s revised annual growth of 6.92%

* Some analysts have attributed the slowdown in factory output growth to capacity constraints in some sectors of the economy, which they hold responsible for elevated inflation

* Annual headline inflation eased to 8.58% in October from a year earlier, lowest in last 10 months

* The central bank has raised its lending rate or the repo rate by 150 basis points since mid-March to rein in inflation and a majority of analysts expect it to hold interest rates when it reviews monetary policy on December 16.