India's economy grew by a better than estimated 7.4 per cent in 2009-10 on the back of double digit expansion in manufacturing sector and not so dismal showing by farm sector.
In fact, the economy grew by a robust 8.6 per cent in the fourth quarter, fuelled by 16.3 per cent expansion in manufacturing sector.
China, the only large country with higher growth rate than India, witnessed 11.9 per cent growth in the same quarter, while the fragile recovery in most countries, particularly Europe, is under threat from a sovereign debt crisis.
Earlier, the Central Statistical Organisation had estimated the Indian economy to grow by 7.2 per cent for 2009-10.
The economic growth had slowed down to 6.7 per cent in 2008-09 after nine per cent expansion in the previous three fiscal years, as the economy came under the impact of global financial meltdown in 2008.
The 7.4 per cent growth clearly showed that stimulus provided by the government through excise duty and service tax cuts have yielded results, as the manufacturing which bore the
brunt of the slowdown, posted 10.8 per cent growth in 2009-10 against 3.2 per cent a year ago.
Bolstered by the growth numbers, Finance Minister Pranab Mukherjee pegged the economic growth for this fiscal at over 8.5 per cent.
"... on the whole it is 7.2 per cent plus (in 2009-10).
I have already stated 8.5 per cent, about 8.5 per cent plus (for the current fiscal)," he told reporters.
Stock markets reacted positively after GDP data came, but profit taking pulled down the equity benchmark index Sensex by around 10 points.
In fact, partial roll back of stimulus in this fiscal's budget significantly slowed down the growth of community, social and personal services to 5.6 per cent against earlier
estimates of 8.2 per cent.
"...since the stimulus has been partially rolled back it also indicates the decline in community and personal and social services etc," Finance Secretary Ashok Chawla said.
Agriculture, which was hit by weak monsoon last year, did not fare as badly as was forecast earlier.
Farm and allied sectors grew by 0.2 per cent in 2009-10, whereas they were shown to decline by 0.2 per cent by advance estimates of the CSO earlier.
The sector posted negative growth of 1.8 per cent in the third quarter of 2009-10 against decline of 1.4 per cent a year ago. In the fourth quarter also, farm sector posted just 0.7 per cent growth against 3.3 per cent a year ago.