Economy on recovery path: grows 7.9 per cent in Q2

New Delhi, Nov 30 (PTI) Belying predictions, the Indian
economy grew by a significant 7.9 per cent in the second
quarter of this fiscal, up from 6.1 per cent in the previous
quarter, essentially due to a good showing by the industry and
the services sector.
The growth compares favourably to 7.7 per cent recorded
in the July-September quarter in the previous year.
Consequently, the economy rose by 7 per cent in the first
half ending September 30 of the current fiscal on the back of
stimulus packages and revival of domestic demand, giving hopes
that final figures for the year could be much higher.
The government, including Finance Minister Pranab
Mukherjee, the Reserve Bank and the Planning Commission had
predicted a growth of about 6-7 per cent, while global
agencies and analysts forecast it to be even lower.
Analysts were expecting a growth rate of 6.1-6.6 per cent
in the second quarter.
The economic growth of close to eight per cent in the
second quarter is also remarkable in the context of just 0.9
per cent expansion in farm production due to a weak monsoon
and continued contraction in exports due to slackening demand
overseas.
However, the manufacturing sector grew by 9.2 per cent in
the July-September period compared to 5.1 per cent in the
corresponding period of last fiscal and mining and quarrying
by 9.5 per cent versus 3.7 per cent recorded in FY09.
Community, social and personal services expanded by
double digit at 12.7 per cent against nine per cent.
Despite being affected by international slowdown, trade,
hotels, transport and communication sector grew by 8.5 per
cent, which is lower than 12.1 per cent a year ago.
Financing, insurance, real estate, and business services
rose by 7.7 per cent against 6.4 per cent.
Electricity, gas and water supply was up 7.4 per cent
compared to 3.8 per cent.
Construction rose by 6.5 per cent, down over 9.6 per cent
a year ago.
It was after September, that growth declined to 5.8
per cent in the subsequent two quarters last year. So, if the
trend continues, the growth rate is expected to be much higher
in the second half of this fiscal.
The size of the domestic economy stood at Rs 17.90 lakh
crore in the first half of FY10. PTI IND
SKT