India's economic growth slows to 8.9%
The Central Statistical Organisation attributes this to a sharp fall in the expansion of industrial output.india Updated: Nov 30, 2007 17:36 IST
India's economic growth slowed to 8.9 per cent during the second quarter of 2007-08 from 10.2 per cent in the corresponding quarter of last fiscal, as a result of a sharp fall in the expansion of industrial output.
The official estimates of India's gross domestic product (GDP) for the second quarter of 2007-08 released on Friday showed that manufacturing growth fell to 8.6 per cent from 12.7 per cent in the same period of the previous year.
The manufacturing sector, which has led India's strong economic growth in recent years, had performed much better in the first quarter with 11.9-per cent growth, the data released by the Central Statistical Organisation (CSO) showed.
Reacting to the official data, Finance Minister P Chidambaram told reporters in the capital that he expected the country's economic growth to be "pretty close" to nine per cent, against the central bank's forecast in the region of 8.5 per cent.
India Inc has been cautioning the government that the tight monetary policy of the Reserve Bank of India (RBI) to curb inflation and ease pressures on rising rupee would take a toll on the demand for industrial goods, and retard growth.
Even the farm sector, which had been a drag on sustaining high GDP growth, had a much better performance in the first quarter, with a growth of 3.8 per cent, the CSO data pointed out.
Quarterly GDP at factor cost at constant prices for the second quarter of 2007-08 is estimated at Rs.7,105.78 billion, showing a growth of 8.9 per cent over the figure of Rs.6,524.50 billion in the corresponding quarter of previous year.
The other areas that registered significant growth in the period are mining and quarrying with 7.7 per cent, electricity, gas and water supply with 7.3 per cent, construction with 11.1 per cent and financial services with 10.6 per cent.
Trade, hotel, transport and communication were also up by 11.4 per cent, while the community and personal services sector was up 7.8 per cent, the data showed.