The Indian economy is growing much faster than even the most optimistic had dared hope with official data released on Monday pegging growth in the second quarter (July-September) at 7.9% year-on-year. Not only is this much higher than the 6.5% estimated officially earlier, it bodes well for the future since it comes over the strong showing in the quarter last year that immediately preceded the slowdown. Understandably cheered up by the highest quarterly growth registered in the last 18 months, finance minister Pranab Mukherjee said it was a result of the Centre’s stimulus packages and hoped that this would provide the ground to post at least 7% growth for the full year 2009-10. “Taken together, the two quarters, I do hope it will be possible for us to achieve 7% plus, but still it is too early to predict. I will wait for the third quarter figures,’’ Mukherjee said. The bad news may be that the better-than-expected growth figures will mount pressure on the RBI to tighten its purse-strings and the government to roll back some of the sops such as duty concessions. For consumers, that could mean higher interest rates and more expensive housing, cars, consumer durables and, probably, even fuel. The remarkable September growth has been made possible because the farming sector beat monsoon worries. Figures for agricultural output showed an increase of 0.9% against expectations of a decline due to a poor monsoon.
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