New Delhi: Indian economic growth moderated to 7.9% in the first quarter of current fiscal, against 9.2% a year ago as rising borrowing costs impacted manufacturing and some other sectors.
However, moderation in the GDP growth was expected as RBI hardened interest rates to control double-digit inflation.
If the first quarter GDP growth continues in the remaining months of this fiscal, the economy would expand at the rate more or less projected by Finance Minister P Chidambaram.
He projected the economy to grow by close to 8%, compared to 9% in the previous fiscal.
India’s GDP stood at Rs7,82,357 crore in the first quarter of this fiscal, against Rs7,24,949 crore in the corresponding period of 2007-08.
Manufacturing growth almost halved to 5.6%, against 10.9% as rising interest rates impacted their expansion. Even though agriculture grew by lower rate of 3%, it is quite considerable on the high base of 4.4%.
The other sectors which witnessed considerable decline in growth rate are electricity, gas and water supply, which expanded at the rate of 2.6% against 7.9%.
In the services sector, trade, hotels, transport and communication grew by 11.2%, against 13.1%.
While, financing, insurance, real estate and business services expanded by 9.3%, against 12.6%.
However, community, social and personal services grew by higher rate of 8.4% against 5.2%.
Construction activities also expanded at higher rate of 11.4%, as compared to 7.7%, while mining and quaring grew by 4.8%, against 1.7%.