Belying predictions, the Indian economy grew by a significant 7.9% in the second quarter (Q2FY10) of this fiscal, up from 6.1% in the previous quarter (Q1FY10), essentially due to a good showing by the industry and the services sector.
The growth compares favorably to 7.7% recorded in the July-September quarter in the previous year. Consequently, the economy rose by 7% in the first half ending September 30 (H1FY10) 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%, while global agencies and analysts forecast it to be even lower at rate of 6.1-6.6% in the second quarter.
The economic growth of close to 8% in the second quarter is also remarkable in the context of just 0.9% expansion in farm production due to a weak monsoon and continued contraction in exports due to slackening demand overseas.
Sector-wise Performance:
**The manufacturing sector grew by 9.2% versus 5.1% in the corresponding period of last fiscal.
**Mining and quarrying by 9.5% versus 3.7% recorded in FY09.
**Community, social and personal services expanded by double digit at 12.7% against 9%.
**Despite being affected by international slowdown, trade, hotels, transport and communication sector grew by 8.5%, which is lower than 12.1% a year ago.
**Financing, insurance, real estate, and business services rose by 7.7% against 6.4%.
**Electricity, gas and water supply was up 7.4% compared to 3.8%.
**Construction rose by 6.5%, down over 9.6% a year ago.
It was after September, that growth declined to 5.8% 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 Cr (Rs.17.90 trillion) in the first half of FY10.
The growth compares favorably to 7.7% recorded in the July-September quarter in the previous year. Consequently, the economy rose by 7% in the first half ending September 30 (H1FY10) 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%, while global agencies and analysts forecast it to be even lower at rate of 6.1-6.6% in the second quarter.
The economic growth of close to 8% in the second quarter is also remarkable in the context of just 0.9% expansion in farm production due to a weak monsoon and continued contraction in exports due to slackening demand overseas.
Sector-wise Performance:
**The manufacturing sector grew by 9.2% versus 5.1% in the corresponding period of last fiscal.
**Mining and quarrying by 9.5% versus 3.7% recorded in FY09.
**Community, social and personal services expanded by double digit at 12.7% against 9%.
**Despite being affected by international slowdown, trade, hotels, transport and communication sector grew by 8.5%, which is lower than 12.1% a year ago.
**Financing, insurance, real estate, and business services rose by 7.7% against 6.4%.
**Electricity, gas and water supply was up 7.4% compared to 3.8%.
**Construction rose by 6.5%, down over 9.6% a year ago.
It was after September, that growth declined to 5.8% 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 Cr (Rs.17.90 trillion) in the first half of FY10.
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