The Reserve Bank has projected that the Indian economy will grow by 7.6 per cent in 2011-12. It had earlier projected GDP growth in FY'12 at 8 per cent, but later revised the figure downward on account of the global slowdown and high domestic inflation.

The Indian economy expanded by 8.5 per cent in the 2010-11 fiscal.

As per the data released today, manufacturing growth slowed to 4.9 per cent during the first half this fiscal, in comparison to robust 9.1 per cent expansion in the first half of 2010-11.

The mining and quarrying sector also declined by 0.5 per cent during the April-September period, compared to a growth of 7.7 per cent in the same period last fiscal.

Furthermore, the agriculture, forestry and fishing sector grew by just 3.6 per cent in the first half, as against 3.7 per cent expansion in the first six months of 2010-11.

Growth of the construction sector stood at 2.7 per cent during the first six months of 2011-12, compared to 7.2 per cent in the corresponding period last fiscal.

The slowdown in the manufacturing sector and decline in mining and quarrying is likely to put further pressure on the government and the RBI at time when the economy is grappling with high interest rates.

India Inc has blamed the tight monetary policy, which has increased the cost of borrowings, for hindering fresh investment and slowing down industrial growth.

The RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation. Headline inflation has been above the 9 per cent-mark since December last year.

The government and the RBI have accepted that high interest rates may hurt the country's growth prospects, but the apex bank has underlined that bringing inflation under control is its major agenda.