Indian GDP grows at 9.3% during April-June of 2007

Continuing the upswing on the strength of the good showing by manufacturing sector, the economy grew by 9.3 per cent during the April-June quarter of the current financial year, when comapred to 9.6 per cent recorded during comparable period last year. India continues to be the second fastest growing economy after China which grew by 11.5% over the same period. India is now a $1 trillion economy after a growth spurt in the past four years second only to China's hot pace of expansion among major economies.

The highlights of the growth story are

• The manufacturing sector grew by 11.9 per cent which is lower than 12.3 per cent recorded during the first quarter of 2006-07.
• The services sector too maintained double digit growth, as demand, in particular, for telecommunications services, residential apartments and office space, air travel and financial services continued to rise. Trade, hotels, transport and communication registered a growth rate of 12 per cent. And, maintaining the trend seen in recent years, “trade, hotels, transport and communication” accounted for a fourth of the GDP (26.8%).
• Growth in agriculture, forestry and fishing was 3.8 per cent, compared to 2.8% in the same period last year. That notwithstanding, the share of agriculture in the total domestic output continues to decline. Indeed, the value of output of “agriculture, forestry & fishing” declined to 17.7% in the quarter under review, from 18.6% in the corresponding period of 2006-07.
• Mining and quarrying sector grew by 3.2 per cent.
• Finance, insurance, real estate and business services grew at 11 per cent during the quarter.
• The wholesale price index for food articles, fish, minerals, manufactured products, electricity and all commodities has risen by 8 per cent, 3.4 per cent, 13 per cent, 5.7 per cent, 2.4 per cent and 5.4 per cent respectively during the quarter.
• The consumer price index for industrial workers rose 6.3 per cent in the quarter.

The forecast for full year remains largely optimistic: finance minister P Chidambaram expects growth in the full year to be 9%, making it third successive year of about 9% growth. His argument being that growth has been driven by domestic consumption and investments. In the coming months, however, economists expect the growth rate to dip a little and close the year around the 9% mark. The Reserve Bank of India, in contrast, is relatively conservative, maintaining that the real GDP growth this fiscal would be 8.5%.

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