New Delhi: Confirming fears of a slowdown, India's economy grew by just 7.7 per cent in the first quarter of the 2011-12 financial year, compared to 8.8 per cent growth in the same three-month period last fiscal, which was mainly due to the poor performance of the manufacturing sector.

The government has projected overall economic growth in the current fiscal at around 8.5 per cent, while the Reserve Bank has projected the growth to moderate to 8 per cent from 8.5 per cent in FY'11.

In the latest data released by the government on Tuesday, GDP growth for the April-June quarter of the 2010-11 fiscal has also been revised downward to 8.8 per cent from the earlier provisional estimate of 9.3 per cent.

During the quarter ending June 30, 2011, growth in the manufacturing sector dipped to 7.2 per cent from 10.6 per cent in the corresponding period of 2010-11.

In addition, the mining and quarrying sector grew by just 1.8 per cent during the quarter under review, as against 7.4 per cent growth in the first quarter of the previous fiscal.

However, farm output showed an improvement, expanding by 3.9 per cent during the quarter under review, compared to 2.4 per cent in the corresponding three-month period last fiscal.

Furthermore, the trade, hotels, transport and communications segments grew by 12.8 per cent in the quarter under review, up from 12.1 per cent in the year-ago period.

The services sector, including insurance and real estate, grew by 9.1 per cent in the June quarter this year, compared to 9.8 per cent expansion in the corresponding period last year.

The Planning Commission has estimated GDP growth at 8-8.3 per cent in the 2011-12 financial year. The Indian economy expanded by 8.5 per cent in the 2010-11 fiscal.