The growth compares favourably to 7.7 per cent recorded in the July-September quarter in the previous year.
Consequently, the economy rose by 7 per cent in the first half ending September 30 of the current fiscal on the back of stimulus packages and revival of domestic demand, giving hopes that final figures for the year could be much higher.
The government, including Finance Minister Pranab Mukherjee, the Reserve Bank and the Planning Commission had predicted a growth of about 6-7 per cent, while global agencies and analysts forecast it to be even lower.
The Prime Minister's economic advisory panel had pegged the economy to grow by around 6.1% in Q2 due to the impact of a weak monsoon on agriculture.
Source: Business-standard India's Q2 GDP at 7.9%
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By ugesh sarkar, Section Indian Economy
Posted on Sun Nov 29, 2009 at 11:45:25 PM EST
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Analysts were expecting a growth rate of 6.1-6.6 per cent in the second quarter. The economic growth of close to eight per cent in the second quarter is also remarkable in the context of just 0.9 per cent expansion in farm production due to a weak monsoon and continued contraction in exports due to slackening demand overseas.
However, the manufacturing sector grew by 9.2 per cent in the July-September period compared to 5.1 per cent in the corresponding period of last fiscal and mining and quarrying by 9.5 per cent versus 3.7 per cent recorded in FY09.
Community, social and personal services expanded by double digit at 12.7 per cent against nine per cent. Despite being affected by international slowdown, trade, hotels, transport and communication sector grew by 8.5 per cent, which is lower than 12.1 per cent a year ago.
Financing, insurance, real estate, and business services rose by 7.7 per cent against 6.4 per cent. Electricity, gas and water supply was up 7.4 per cent compared to 3.8 per cent. Construction rose by 6.5 per cent, down over 9.6 per cent a year ago.
It was after September, that growth declined to 5.8 per cent in the subsequent two quarters last year. So, if the trend continues, the growth rate is expected to be much higher in the second half of this fiscal.
The size of the domestic economy stood at Rs 17.90 lakh crore in the first half of FY10.
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