The manufacturing sector grew at 11.3 per cent during the first quarter of this year as against 10.7 per cent of the previous year while the trade sector grew at 13.2 per cent as compared to 11.7 per cent during the first quarter of 2005-06.

However, this year’s growth remained above the 8.5-per cent mark largely on account of growth in the agriculture sector, which has a higher weight in the GDP basket, remaining at 3.4 per cent, while growth in the financing, insurance and real estate marginally improved from 8.8 per cent during the first quarter of 2005-06 to 8.9 per cent during the first quarter of this year.

Chidambaram said that financial sector was “the heart of the economy” and unless reforms in this sector were “completed” it would “be difficult to sustain high growth.” Referring to pending reforms in areas such as the banking and pension sectors, he said: “I wish and hope that we are given the political space to push through reforms.”

While growth in the construction sector dipped from 12.4 per cent to 9.5 per cent during the first quarter of 2006-07, the Finance

Minister expressed confidence that the economy would “at least” grow by 7.5 per cent every quarter and said that the economy could “even do 8 per cent if we followed prudent policies and fiscal discipline.”