Mumbai, July 27 - A day ahead of the review of its monetary policy Tuesday, India's central bank sharply raised its growth forecast for the country's economy to 6.5 percent from its earlier projection of 5.7 percent.

The Reserve Bank of India (RBI) said the revision was on account of positive outlook emanating from several sources, including the performance of core infrastructure industries, overall manufacturing output and roboust showing by the services sector.

The forecast has been made in the first quarterly review of India's macro-economic and monetary development for this fiscal, a day ahead of the review of the central bank's monetary policy for 2009-10 by Governor D. Subbarao.

'Eighth round of survey of professional forecasters, conducted by the Reserve Bank in June, placed overall (median) growth rate for 2009-10 at 6.5 percent, revised upwards from 5.7 percent in the earlier survey,' the RBI said in a report.

The central bank said other indicators like increase in cement production, improved railway freight earnings and growth in new mobile connnections during April-May were some more signs that the demand may be on the verge of a revival.

The recovery in stock markets and improved corporate earnings were also some indicators suggesting that the economy could be looking up.