A sluggish manufacturing sector pulled down the economic growth to 8.9 per cent during the July-September quarter from 10.2 per cent in the comparable period last year despite a good showing by the agriculture and mining sectors.

Consequently the growth during the first half of 2007-08 came down to 9.1 per cent from 9.9 per cent in the previous year, according to data released by the government in New Delhi on Friday.

The major contributor for the slow-down -- the manufacturing sector recorded a lower growth of 8.6 per cent during the second quarter compared to 12.7 per cent. Barring Farm and mining sector, all other segments including the services and transport recorded lower growth.

Construction sector recorded an unaltered growth of 11.1 per cent in the second quarter this fiscal.

A tight monetary policy of the Reserve Bank of India [Get Quote] reducing consumer demand and rupee appreciation dampening exports seem to have pulled down GDP growth in the first six months of current financial year.

The growth of financial, real estate and business services slowed down to 10.6 per cent in second quarter as against 11.1 per cent a year ago partially due to RBI measures.

Analysts, however, said India will still be the fastest expanding major economy after China with GDP growth underpinned by strong spending to improve the country's creaky infrastructure.

The construction sector, on which government had earlier imposed various restrictions, has shown a marginal improvement by posting a growth of 10.9 per cent in the first half this year as against 10.8 per cent during the corresponding period last fiscal.

Meanwhile, the growth in transport, communication, trade and hotel sector slowed down to 11.4 per cent in the second quarter from 14.2 per cent a year ago.

The power sector, whose slow growth has impacted the GDP growth by 1.5 to 2 per cent a year, also failed to show any signs of improvement. It posted a growth of 7.3 per cent in Q2 in 2007-08 as against 8.1 per cent a year ago. The sector had grown by 6.9 per cent in the first quarter this fiscal.

Despite a rise in government spending on social sector through many UPA flagship programmes, it grew by 7.8 per cent in the first quarter this fiscal as against 8.3 per cent in the same period last year.