New Delhi: The Indian economy is likely to grow at a moderate 8.7% during the current fiscal, against 9.6% during 2006-07, which was the highest in the last 18 years.

“GDP at factor cost at constant (1999-2000) prices in the year 2007-08 is likely to attain a level of Rs31,14,452 crore as against Rs28,64,310 crore in 2006-07,” according to the advance estimates of national income released by the government today (7 February).

The estimated growth rate is slightly higher than the conservative RBI projection of 8.5%.

Finance Minister P Chidambaram had earlier exuded confidence that the economy will grow at close to 9% during 2007-08.

The GDP grew at 9.1% during the first half of this fiscal. It grew at 9.3% in the first quarter and 8.9% in the next three-month period, hinting at a further moderation during the rest of the year.

The advance estimates revealed that agri and allied activities will likely grow at a much slower rate of 2.6% during the fiscal, against 3.8% in the previous year.

Among industrial sector, manufacturing growth is also likely to come down from 12% last fiscal to 9.4%. Mining and quarrying sector is estimated to grow at 3.4% as compared to 5.7% in the previous financial year.

Among the booming services sector, trade, hotels, transport and communication activities are likely to expand by 12.1% from 11.8%.

However, finance, real estate and business services are estimated to grow at 11.7% as against 13.9 per cent.