GDP to grow more than 9%: PM

India's economy may expand more than 9 per cent in the current fiscal, Prime Minister Manmohan Singh said, adding that growth was a "necessary condition" to eradicate poverty in the country.

The United Progressive Alliance government wants to accelerate growth to as much as 10 per cent by 2012, to generate jobs and improve the lives of half the country's 1.1 billion people who live on less than Rs 100 a day.

Still, the second-fastest expansion among the world's top 15 economies pushed inflation in India to a two-year high last month, eroding the purchasing power of the nation's poor.

"We are trying to curb inflation without affecting the strong growth impulses," Singh told the Lok Sabha today.

"The Reserve Bank of India's (RBI) effort to moderate growth of money supply and the finance ministry's move to reduce Customs duty on essential commodities will have a desired effect on inflation," he added.

Inflation has stayed above the RBI's tolerance level of 5 per cent since September and the bank may raise its key overnight lending rate next month for the second time this year to curb prices, according to Goldman Sachs Group Inc.

Last month, the RBI unexpectedly increased the amount of cash lenders have to set aside to cover deposits for the second straight month to curb inflation.