Prime Minister Manmohan Singh had predicted 7.5 percent growth for the
current fiscal year through March 2006, and said the country should aim
to accelerate the pace to 10 percent in two to three years.
The government said that India's economy "expanded 8.1 percent in
the April-September period compared to a year ago, lifted by strong
manufacturing and buoyant growth in tourism and financial
services", reported Associated Press from New Delhi.
was also a surprise for many analysts, who had expected growth to slow
through the year because of high oil prices and suspected sluggish
But government data showed manufacturing growth averaged 10.2 percent
during the period despite a slowdown in the second quarter, while
services continued to remain as robust. Financial and real estate
services grew 9.1 percent in the six-month period from a year ago.
Singh said his government was giving a big push to agriculture, which
has long been a drag on the broader economy.
"The numbers are stronger than expected," said Rajeev Malik,
an economist with JP Morgan & Co. based in Singapore. "We will
probably raise our full-year growth forecast to 7.5 percent from 7.2
percent predicted earlier."
Malik said most analysts had earlier expected manufacturing output would
grow much slower in the second quarter than the first quarter, but the
data showed that hasn't happened.
"Services were even a bigger surprise," he said. The most
buoyant segment in this sector was the hotel and transport industry that
expanded 12.2 percent in the April-September period compared with the
same period last year. Hotel and transport services apparently were
driven by increased tourist arrivals.
's economic potential has lifted the nation's stock market to records,
with the 30-share benchmark index of the Bombay Stock Exchange -
the Sensex - crossing the 9,000 points
mark for the first time on Monday.
The stock rally since late April has been driven by foreign funds which
have pumped a record $8.5 billion (euro7.2 billion) into Indian shares.
Overseas investors are increasingly looking to
, which has been one of the world's fastest growing economies over the
past decade and is increasingly opening up to foreign competition.