New Delhi: Powered by construction and services, the Indian economy notched a reasonable growth rate of 7% in the second quarter of the current fiscal, but analysts said monetary supply should be further eased to prevent the growth from declining in the remaining quarters.
Though quarterly GDP growth was the lowest since the last quarter of 2004, it was better than expected by many analysts, despite poor growth in manufacturing, agriculture and mining.
The Prime Minister’s economic panel member M Govinda Rao said, “It is better than expected, but in the second half there will be definitely a slowdown in manufacturing and services. I expect overall GDP figure to be at seven per cent this fiscal.”
Compared with the year-ago period, the Indian economy seemed to be slowing as the growth was 9.3% in the second quarter of the previous fiscal, but it was expected to moderate as a consequence of the global financial crisis and other domestic factors.
For the first half of this fiscal, the economy expanded at 7.8%, compared with the 9.3% last fiscal. This is much in line with official expectations of 7-8% growth for this fiscal, but quite higher than projected by many others.
Construction grew at 9.7%, which is fairly good, even though it is slower than the 11.8% in the corresponding period of the previous year.
All major segments in the services sector recorded high growth, though slower than in the second quarter of the fiscal 2007-08.
However, the number of air passengers has declined by 13.7% and analysts expect it to further come down, also because of the impact of terror strikes in Mumbai.