Backed by a strong industrial and farm output, the Indian economy grew by 8.8 per cent between April and June, reviving hopes of a return to the heady days of sustained growth.
Faster growth in the broader economy is expected to lead to greater job opportunities, higher returns on investment and greater corporate income.
But prices remain a key concern. The growth in gross domestic product (GDP) was driven by a robust 12.4 per cent growth in manufacturing.
GDP is the total value of goods and services produced in a country. Finance Minister Pranab Mukherjee said, "I am quite confident about whatever was projected in the economic survey that GDP growth will not be less than 8.5-8.75 per cent."
The farm sector grew by 2.8 per cent in the first quarter of 2010-11 fiscal, higher than 1.9 per cent in the same period last year.
The services sector clocked a growth of 9.7 per cent during the quarter against 7.9 per cent a year ago.
But rising prices still remain a concern since RBI could hike key rates to tame inflation. Wholesale prices based inflation in July was estimated at 9.97 per cent, as food prices continued to remain at elevated levels, although there have been signs of easing. A good monsoon and a strong kharif harvest will cool food prices and boost demand.
{{/usCountry}}But rising prices still remain a concern since RBI could hike key rates to tame inflation. Wholesale prices based inflation in July was estimated at 9.97 per cent, as food prices continued to remain at elevated levels, although there have been signs of easing. A good monsoon and a strong kharif harvest will cool food prices and boost demand.
{{/usCountry}}"Demand for durable goods remains strong with indicators such as car sales continuing to post impressive growth rates and this is likely to sustain into the year," said Abheek Barua, chief economist, HDFC Bank.