India's gross domestic product (GDP) grew at 7.6 per cent in the second quarter of the current financial year (July-September 2008-09) on the back of reasonably good growth in the construction and service sectors.

Quarterly GDP at factor cost at constant (1999-2000) prices for Q2 of 2008-09 stood at Rs7,71,451 crore, as against  Rs7,16,982 crore in Q2 of 2007-08, showing a growth rate of 7.6 per cent over the corresponding quarter of previous year, a government press note said. 

At 7.6 per cent the quarterly GDP growth was the lowest since the last quarter of 2004, but better than projected by some analysts. Future growth will, however, depend on how the authorities manage growth for credit demand and levels of consumption.

The Indian economy has been growing at over 9 per cent since 2004 and until last year. The economy grew at 9.3 per cent in the same quarter of the previous year.

For the first half of this fiscal, the economy expanded at 7.8 per cent, compared with the 9.3 per cent in the first half of the previous fiscal.

Construction grew at 9.7 per cent in July-September 2008-09, even though it is slower than the 11.8 per cent in the corresponding period of the previous year. The service sector also recorded high growth, though slower than in the second quarter of the fiscal 2007-08.

The sectors which recorded significant growth in July-September 2008-09 are, manufacturing (5 per cent), construction (9.7 per cent), trade, hotels, transport and communication (10.8 per cent), finance, insurance, real estate and business services (9.2 per cent) and community, social and personal services (7.6 per cent).  The growth rate in agriculture, forestry & fishing' is estimated at 2.7 per cent in this period.

According to the latest estimates of the index of industrial production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 3.8 per cent, 4.7 per cent and 3.2 per cent, respectively in Q2 of 2008-09, as compared to the growth rates of 7.4 per cent, 8.9 per cent and 7.1 per cent in these industries in Q2 of 2007-08.

The key indicators of construction sector, namely, cement and finished steel, registered growth rates of 6.3 per cent and 4.8 per cent, respectively in Q2 of 2008-09, as against the growth rates of 10.3 per cent and 10.0 per cent, respectively in Q2 of 2007-08, the release said.

In the service sector, the key indicators of railways, namely, the net tonne kilometers and passenger kilometers have shown growth rates of 9.9 per cent and 12.0 per cent, respectively in Q2 of 2008-09.

In the transport and communication sectors, the production of commercial vehicles, cargo handled at major ports, cargo handled by the civil aviation, passengers handled by the civil aviation and the total stock of telephone connections (including WLL and cellular) registered growth rates of (-) 1.7 per cent, 5.4 per cent, 5.7 per cent, (-) 13.7 per cent and 42.2 per cent, respectively. 

Among other key indicators, aggregate bank deposits, and bank credits have shown growth rates of 19.8 per cent, and 24.8 per cent, respectively in Q2 of 2008-09 over Q2 of 2007-08.

The wholesale price index (WPI), in respect of the groups, food articles, fish, minerals, manufactured products, electricity and all commodities, has risen by 6.6 per cent, 3.3 per cent, 19.3 per cent, 11.1 per cent, 1.4 per cent and 12.4 per cent, respectively during Q2 of 2008-09, over Q2 of 2007-08. The consumer price index for industrial workers (CPI-IW) has shown a rise of 9.0 per cent during Q2 of 2008-09 over Q2 of 2007-08.

GDP at factor cost at current prices is estimated at Rs11,66,403 crore, as against Rs9,82,968 crore in Q2, 2007-08, showing an increase of 18.7 per cent.