A bounce back in manufacturing and recuperating farm output has driven India's quarterly economic growth to 8.6 percent, the best in two years as Asia's third-largest economy returns to pre-crisis levels of expansion.

Beating the Government forecast of 7.2 percent, growth for the financial year ended March was 7.4 percent, officials said on Monday. The acceleration in the January-March quarter is likely to add to pressure on the central bank to raise interest rates to contain inflation.

Thanks to strong domestic consumption and investment, India has rebounded from the global downturn faster than expected. The figures from the Central Statistical Organization are likely to keep the central bank on its path of gradual rate increases, say analysts.

The Reserve Bank of India (RBI) had raised interest rates in April and March as it battled high levels of inflation.

"I expect the current economic momentum to remain”, Indian Finance Minister Pranab Mukherjee said after the figures were released.

He added that he expected the economy to grow by 8.5% in the financial year to March 2011.