NEW DELHI (Commodity Online) : India’s economy, third largest in Asia grew 8.8 percent from a year earlier in the April-June quarter, the best in two years.

According to Central Statistical Organization, the growth was largely driven by the strong performance of the manufacturing sector and services such as trade, hotels and communications.

The growth was higher than the 8.6 percent expansion in the previous quarter. India's gross domestic output had increased 6 percent in the April-June quarter a year earlier.

For the fiscal year ended March 31, the economy expanded 7.4 percent and the government projects it will grow more than 8.5 percent in the current fiscal year.

The figures show strong farm and industrial output are pushing Asia's third-largest economy back to pre-crisis levels of growth.

But economists caution that economic doldrums this time last year are amplifying current growth rates.

Some believe India will slow, especially after the central bank's four rate hikes begin to be felt in the wider economy.

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