Growing at 9.2%, India's economy grew a faster-than-expected pace in the second quarter to September, official data showed Nov. 30. Finance Minister P. Chidambaram hailed the figures and said "the fact that the economy recorded the highest growth of 9.1% in the first half of any fiscal (year) since economic reforms began in 1991-92 makes us doubly happy."
The gains were led by services, including real estate and communications, which grew 13.9%, followed by manufacturing at 11.9% year-on-year.
He cautioned that the rapid growth has stoked inflation but argued that the government would bring it under control through "supply side management" in an effort to avoid a hike in interest rates.
To that end, the government cut fuel costs Nov. 29 for gasoline by just over 4% and diesel by slightly above 3% to reflect falling global oil prices, aiming to control rising prices for food hit by higher transport bills.
Wholesale price inflation, which has stayed above the government's aim of around 4% and hit 5.29% in the second week of November, has led to expectations of an interest rate increase by the Reserve Bank of India in its next policy review in January.
India's roughly $780 billion economy has now posted growth rates above 8% for nearly the past two years, placing it second to China among the major economies. China's $2 trillion economy expanded 10.4% in the quarter ended September.
Copyright Agence France-Presse, 2006