While agriculture remained stagnant at 3.4 per cent during April-June 2006-07, manufacturing sector rose 11.3 per cent in the first three months of the current fiscal as against 10.7 per cent in the same period of 2005-06.

"Concerns regarding spiraling crude have ebbed. Slowdown in rising interest rates and a good monsoon will help the economy do well in the times to come," said Ashish Kapur, CEO, Invest Shoppe.

In services, trade, hotels, transport and communications sector showed the highest growth of 13.2 per cent in the first quarter compared to 11.7 per cent in the year-ago period.

Construction sector, however, slowed down to 9.5 per cent this year from 12.5 per cent, while growth in electricity, gas and water supply slipped to 5.4 per cent from 7.4 per cent in April-June 2005-06.

Financing, insurance, real estate and business services grew marginally higher at 8.9 per cent as against 8.8 per cent, and community, social and personal services rose by 7.4 per cent from 7.3 per cent in the corresponding period of last year.

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