New Delhi: India’s economy grew faster than estimated before central bank Governor Raghuram Rajan reviews interest rates on Tuesday for a final time this year.

Gross domestic product rose 7.4 per cent in July-September from a year earlier, after a 7 per cent expansion the previous quarter, the Central Statistics Office said in a statement in New Delhi on Monday. The median of 44 economist estimates in a Bloomberg survey was 7.3 per cent. China grew 6.9 per cent in the same period, while Russia contracted 4.1 per cent and Brazil is forecast to shrink 4.2 per cent.

India’s world-beating pace supports the case for Rajan to hold rates after cutting them this year by the most since 2009. It also offers respite to Prime Minister Narendra Modi, who’s struggling to push key economic bills through parliament. India’s stocks and currency are among Asia’s worst performers over the past month as investors become impatient with the pace of reforms.

“India’s economic growth is showing signs of moderate improvement with the manufacturing sector doing most of the heavy lifting,” economists at Mumbai-based Yes Bank Ltd, led by Shubhada Rao, wrote in a report before the data. They predict the expansion will accelerate to 7.5 per cent in the 12 months through March 2016 from 7.3 per cent in the previous year.

GST

India’s proposed goods and services tax, known as GST, is crucial to boosting revenue as a proposed pay increase for government staff puts Modi’s deficit-reduction goals in jeopardy. The shortfall reached 74 per cent of the full-year goal in the first seven months itself, data showed on Monday.

“The increased salaries may hamper the government’s planned shift from more current expenditure to more capital expenditure,” said Indranil Pan, chief economist with IDFC Ltd. That threatens Modi’s plan to rely on public investment to kickstart a recovery while private companies battle high debt, he said.

Gross value added — a component of GDP closely watched by Rajan — rose 7.4 per cent in April-September from a year earlier, matching the forecast, after a 7.1 per cent increase in the previous quarter.