The Indian economy has shown signs of recovery with gross domestic product (GDP) growing by 5.5 per cent in the first quarter of 1999-2000, the Central Statistical Organisation said yesterday.
Year-on-year GDP growth in the first quarter of the previous fiscal was 3.6 per cent. The budget estimate for GDP growth for the current fiscal is 6.5 per cent while the Department of Statistics has projected a rate of 5.8 per cent.
The GDP growth has been boosted mainly by an improved performance in the manufacturing and services sectors as opposed to the last quarter of 1998-99, when it was fuelled by agriculture.
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While manufacturing showed an increase of 6.2 per cent over the corresponding quarter last year, financing, insurance, real estate and business services grew at 7.8 per cent. Community, social and personal services also grew at 7.8 per cent.
The construction sector grew at 6.7 per cent while trade, hotels, transport and communication grew at 6.2 per cent as opposed to a mere 1.1 per cent in the corresponding quarter last year.
However, the growth rate for electricity, gas and water supply slumped to 5.2 per cent from last year's 9.7 per cent.
"The figures reflect a pick-up in demand that has been visible in the past few months. But the question is how long it will continue. We have to be careful and cannot become complacent by these higher numbers," said Pradeep Srivastava, chief economist, National Council for Applied Economic Research.
The performance of the agricultural sector is, however, not expected to be very good this year. Production of coarse cereals and pulses is expected to decline by 10 per cent and 8.8 per cent respectively during the kharif season, but rice output is expected to grow 4.2 per cent. Oilseeds is set to dip 26.2 per cent, while sugarcane is expected to grow 4.9 per cent.
Quarterly Estimate of GDP for Q1 (April-June)
% change over previous year Q1 at 1993-94 prices
98-99 99-2000
Agriculture, forest & Fishing 2.1 2.8
Mining & Quarrying -0.6 -2.0
Manufacturing 5.2 6.2
Electricity,gas & water supply 9.7 5.2
Construction 4.2 6.7