Low growth in manufacturing sector led to the decline in economic growth to 8.9% during the July-September in fiscal year 2007-08, as against 10.2% in the corresponding quarter, a year ago.
Consequently the growth during the first half of 2007-08 came down to 9.1% from 9.9% in the same period last year, according to data released by the government in New Delhi on Friday.
The major contributor for the slow-down -- the manufacturing sector recorded a lower growth of 8.6% during the second quarter compared to 12.7%. Barring Farm and mining sector, all other segments including the services and transport recorded lower growth.
Construction sector recorded an unaltered growth of 11.1% in the second quarter this fiscal.
The agriculture sector showed an improved growth of 3.6% compared to 2.9% while mining and quarrying sector nearly doubled the growth to 7.7% from 3.9%.
A tight monetary policy of the Reserve Bank reducing consumer demand and rupee appreciation dampening exports seem to have pulled down GDP growth in the first six months of current financial year.
The growth of financial, real estate and business services slowed down to 10.6% in second quarter as against 11.1% a year ago partially due to RBI measures.
The construction sector, on which government had earlier imposed various restrictions, has shown a marginal improvement by posting a growth of 10.9% in the first half this year as against 10.8% during the corresponding period last fiscal.
Meanwhile, the growth in transport, communication, trade and hotel sector slowed down to 11.4% in the second quarter from 14.2% a year ago.
The power sector, whose slow growth has impacted the GDP growth by 1.5 to 2% a year, also failed to show any signs of improvement. It posted a growth of 7.3% in Q2 in 2007-08 as against 8.1% a year ago. The sector had grown by 6.9% in the first quarter this fiscal.
Despite a rise in government spending on social sector through many UPA flagship programmes, it grew by 7.8% in the first quarter this fiscal as against 8.3% in the same period, last year.
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