INDIA’S gross domestic product (GDP) likely expanded more than 7 percent last quarter, thanks to continued strength in services industries, The Wall Street Journal reported yesterday.

Gross domestic product in the three months ended March 31 likely rose 7.4 percent from a year earlier, according to the median estimate in a poll of 14 economists by the newspaper. That is slightly better than the 7.3 percent expansion in the preceding quarter.

The Indian Government is scheduled to issue the data today.

A recovery in the farm sector and steady performance of services is expected to support growth, said Rishi Shah, an economist at Deloitte. “However, industrial activity could see some moderation,” he said.

While India’s gross domestic product expansion is higher than that of any other large economy, much of its performance can be attributed to a revamping in the way it measures its growth, economists say. Some economic indicators suggest growth may not be so strong.

The most recent industrial production data underscore doubts. Industrial output rose an average 0.6 percent in the first three months of the year, a far cry from the rosy picture that the gross domestic product numbers are painting.

Consumer demand in rural areas has also been weak, hurt by a fall in household incomes following two back-to-back years of below-average rainfall.

There is hope rural demand will rebound this year with above-average monsoon rains and as nearly 10 million government employees and pensioners get a scheduled pay increase.

Some economists say there are other encouraging signs as well. Sales of cars and commercial vehicles have improved lately. Key infrastructure sectors such as cement and steel have also performed relatively well, pointing to a pickup in construction activity. Company earnings have also improved.

“An incremental improvement is there in the economy, but it isn’t that big,” said D.K. Pant, chief economist at India Ratings and Research. (SD-Agencies)