India’s economy grew by just 7.7 pc in the first quarter of the 2011-12 financial year, compared to 8.8 pc growth in the same three-month period last fiscal, which was mainly due to the poor performance of the manufacturing sector.

The government has projected overall economic growth in the current fiscal at around 8.5 percent, while the Reserve Bank has projected the growth to moderate to 8 percent from 8.5 percent in FY’11.

In the latest data released by the government on Tuesday, GDP growth for the April-June quarter of the 2010-11 fiscal has also been revised downward to 8.8 percent from the earlier provisional estimate of 9.3 percent.

During the quarter ending 30th June 2011, growth in the manufacturing sector dipped to 7.2 percent from 10.6 percent in the corresponding period of 2010-11.

In addition, the mining and quarrying sector grew by just 1.8 percent during the quarter under review, as against 7.4 percent growth in the first quarter of the previous fiscal.

However, farm output showed an improvement, expanding by 3.9 percent during the quarter under review, compared to 2.4 percent in the corresponding three-month period last fiscal.

Furthermore, the trade, hotels, transport and communications segments grew by 12.8 percent in the quarter under review, up from 12.1 percent in the year-ago period.

The services sector, including insurance and real estate, grew by 9.1 percent in the June quarter this year, compared to 9.8 percent expansion in the corresponding period last year.

The Planning Commission has estimated GDP growth at 8-8.3 percent in the 2011-12 financial year.

The Indian economy expanded by 8.5 percent in the 2010-11 fiscal.