India’s economy expands 5.3% on strong services sector
New Delhi, India (4E) – India’s economy grew 5.3 per cent in the fiscal second quarter compared to the same period last year, led by increased activity in the services sector even as manufacturing and agricultural sectors weakened.
Official data shows that India’s gross domestic product (GDP) during the quarter through September for the current fiscal year ending March 31, 2013 is slightly slower than the 5.5 per cent expansion in the first quarter.
The economic growth during the period is lower compared to the 6.7 percent gain during the July-September period in 2011, although it slightly beats the 5.2 percent growth estimated by economists surveyed by the Dow Jones Newswires.
In an effort to boost the growth rate, the government has taken a series of reforms such as opening certain sectors to foreign investment like retail and aviation.
India’s Finance Minister P. Chidambaram said last week that the country needs innovation to boost output otherwise face “a difficult situation”.
The agricultural sector grew just 1.2 per cent while manufacturing gained merely 0.8 per cent in the last quarter. Overall growth was pushed higher by a stronger performance in the services sector, which comprises 55 per cent of the economy’s output.
Analysts have urged the government to implement more measure to boost the economy.