The country's growth rate is expected to pick up in the second half of this fiscal and reach 6.7 per cent for entire 2012-13, Prime Minister's Economic Advisory Council Chairman C Rangarajan said on Monday.

Stating that there were indications to this effect, he told reporters here that the monsoon had turned out to be better than predictions made a few months ago.

"Our own forecast is that the growth rate of economy in the current (financial) year will be 6.7 per cent, that is a better shape than last year. I think, the growth will pick up in the second half of this year. Enough indications are there," Rangarajan said.

He said the agriculture performance this year would also be better

than what was expected a few months ago. "Therefore, taking all these factors into account, I expect there will be a growth rate of 6.7 per cent in current (financial) year."

Economic growth had slowed to a nine-year low of 6.5 per cent in 2011-12. The GDP growth in the April-June quarter was 5.5 per cent, lower than 8 per cent recorded in same period of last fiscal.

On the diesel price increase, he said it would result in some increase in the wholesale price index as well as other price indices.

"But in the absence of the increase of diesel price, the fiscal deficit would have been higher. Therefore, one has to balance against the other," he said.

He defended the diesel price hike, which has evoked opposition from various quarters, saying it was "appropriate" in the medium term so as to contain "inflation".