GDP for the country rose 7.8% for the quarter ending March 31, over the corresponding quarter of last year. The has been the slowest pace over the last five quarters.

The inflation rate in India is the second fastest among major emerging economies, the fastest being in Russia. The Reserve Bank of India (RBI) had signaled further increase in interest rates. Goldman Sachs and Credit Suisse along with International Monetary Fund, project lower expansion in India for 2011.

The RBI Governor D. Subbarao had increased repo-rate to 7.25 percent on May 3 making it the biggest hike since July 2008. It was even stated that the controlling inflation is more important for the RBI even if it means restraining growth. The RBI expects that the inflation rate will probably decline much after September.

Manufacturing went up by 5.5 percent during the March quarter. Finance and insurance services increased by 9 percent compared to 10.8 percent jump in the previous quarter. Farm output rose 7.5 percent while mining advanced 1.7 percent, the report.

In neighboring China, the central bank has already increased interest rates four times since mid-October. Meanwhile, the Bank of Korea has held itself from increasing the interest rate for two months, after it had raised a quarter point each during the month of January and March.

The Russian Central Bank, other country which is being hounded by inflation, saw an increase in its overnight deposit rate. The benchmark refinancing and repo-rates were left unchanged since the the Russian Central Bank sought to curb inflation without hurting growth. Consumer prices in the nation rose 9.6 percent in April.

OneIndia Money