indian economy grows at 9 percent quarterly rate

HONG KONG (MarketWatch) -- India's economy grew at a faster-than-expected 9.3% in the quarter ending March 31, the government said Wednesday.

The analyst consensus estimate had been 7.6%, according to Dow Jones Newswires.
Growth for the full fiscal year ending in March was 8.4%, compared to an earlier official estimate of 8.1%.

In the fourth quarter, construction industry output was up 12%, manufacturing output was up 8.9%, and farm output was up 5.5%.

The strong data failed to stimulate Indian stocks. The benchmark Sensex index, which tracks 30 companies on the Bombay Stock Exchange, was down 5.27% in early afternoon trading.

"The good thing is that when everything settles, everyone will remember that India is a genuine growth story," said Samir Arora, manager of the $245 million, India-focused Helios Strategic Fund.

The Sensex has fallen nearly 20% from its record-high May 10 close of 12,612.38.

Economic officials moved to quell concerns that the economy may be growing too fast.

"I don't think there is any evidence of overheating. Macroeconomic indicators are in okay shape," said Montek Singh Ahluwalia, deputy chairman of India's Planning Commission.

In contrast to China, where economic growth has been driven largely by investment, India has seen a significant contribution from domestic consumption as well.

"Growth has been more diverse," said Arora. "It has been driven more by spending than anything else."
Ilya Garger is a reporter for MarketWatch based in Hong Kong.