New Delhi - The Indian economy rebounded strongly during the second quarter of the financial year growing at 7.9 per cent, far exceeding expectations, officials said Monday. Gross domestic product (GDP) grew nearly 8 per cent during July to September, beating the 6.1 per cent growth in the previous quarter, data released by the Central Statistical Organization showed.
Asia's third-largest economy expanded at the fastest pace in over a year, logging a growth higher than the 7.7 per cent figure during the corresponding period last year.
The growth numbers surprised economic analysts who forecast a growth of between 6.1 to 6.5 per cent, raising hopes that the final figures for the year could be much higher.
India's financial year runs from April to March.
The recovery amid the global financial crisis was led by a 9.2 per cent growth in manufacturing compared to the 5.1 per cent growth in the sector during the same quarter last year.
Mining and construction activities also expanded by 9.5 per cent and 6.5 per cent respectively.
Despite concerns over the impact of drought and deficient rainfall during the monsoon season, the agriculture sector posted a 0.9 per cent growth beating forecasts in the negative terrain.
"We had expected a 6.8 per cent growth and the expectation of the markets was lower but 7.9 per cent is way, way beyond our expectations. There is something really big going on which is different from the way we understand the economy is unfolding," said Mahesh Vyas, chief executive of Centre for Monitoring Indian Economy.
Economic experts who said the robust growth was on the back of stimulus packages and revival of domestic demand said the economy could expand at least 7 per cent during the current fiscal against their earlier estimate of around 6.5 per cent.
"There are many things in the numbers which are very encouraging. It does look from these numbers that a reasonable projection for the current year would be more than 6.5 per cent," Planning Commission deputy chairman Montek Ahluwalia told reporters.
Suman Bery, director general of the National Council for Applied Economic Research, sounded a note of caution.
"Unfortunately what the original estimates sometimes give, revisions take away. So I would say it is time to get excited but not too excited," he told the NDTV network.
The impressive GDP growth buoyed the Indian markets which gained 2 per cent after the data was released.
The benchmark Bombay Stock Exchange's Sensex index was quoted at 17,001.74, up 369.73 points or 2.2 per cent during afternoon trading at 12:45 pm (0715 GMT).
Similarly, the 50-share S&P CNX Nifty of the National Stock Exchange had also gained 2.33 per cent and was ruling at 5050-levels.
