NEW DELHI: Even as the Mid-year Review of the economy has projected an overall growth of over seven per cent in the current fiscal on the back of 8.1 per cent growth achieved in the first half, it has identified the concerns and pitfalls while highlighting the measures that need to be taken to sustain the high growth path.

The review, tabled in Parliament on Friday, has painted a healthier-than-before picture on the farm front with the growth in agriculture expected to be 3-3.5 per cent, especially aided by a five per cent increase in foodgrains output recorded in 2004-05.

"Given the forward linkages of agriculture and the favourable business and consumer sentiment in the first half, a continuation of the 8.5-10 per cent growth in industrial and services sectors is likely to result in an overall growth of over 7 per cent in 2005-06,'' the review said.

"For sustained, robust and inclusive growth, what is needed is a combination of appropriate and timely policies and delivery mechanisms to enhance investment, rapid progress in infrastructure and accelerated improvements in education and health of the people," it said.

A cause of concern was the deceleration in growth in the production of petroleum products, coal and electricity as these had important linkages to the rest of the economy.

To tide over the problem, the review said: "There is an urgent need for reforms in the coal sector, in terms of pricing and distribution, foreign direct investment policy, and opening of coal mining to private sector without restriction of captive consumption."

The infrastructure sector, the review pointed out, continued to be a major bottleneck impeding the potential growth surge. The incremental spending on infrastructure in India is also too low for the size of the economy and its needs. For quality infrastructure, the Committee on Infrastructure, headed by the Prime Minister, Manmohan Singh, has estimated investment requirements in some of the key sectors and a substantial share of this is expected to come from the private sector with increasing resilience being placed on public-private partnership (PPP) projects for bridging the investment gap, the review said.

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