India’s economy projected to grow

NEW DELHI (AP ) – India’s economy is likely to grow 8.7 percent in the current financial year despite fears that a recession in the United States would sap demand for exports, the government said Thursday.

The data released by the state-run Central Statistical Organization is slightly above the Indian central bank’s growth estimate of 8.5 percent in gross domestic product for the period April 2007 through March 2008.

Services, construction and manufacturing sectors are likely to be the biggest growth drivers, the organization said. India’s agriculture sector, which provides livelihoods to some 70 percent of the country’s population of more than 1.1 billion, still lagged, it said.

The Indian economy expanded 9.6 percent in the last fiscal year after average growth of 8.6 percent in the previous four years.

The Indian economy may take some hits from a U.S. recession, but its fundamentals are sound, India’s Finance Minister P. Chidambaram said last month.

”I see the Indian economy as a robust, performing economy, but not fully insulated from global events,” Chidambaram said.

In the booming services sector, trade, hotels, transport and communication activities were likely to expand 12.1 percent, compared to expansion of 11.8 percent the previous fiscal year, the statistics organization said.

Agriculture appeared to be growing at a much slower rate of 2.6 percent during the current financial year, down from 3.8 percent the previous year, it said. Growth in the industrial sector was likely to slow to 9.4 percent from 12 percent, it said.