It was a day full of positive news for the Indian economy with three major indicators on growth, fiscal deficit and balance of payments showing healthy improvements on a year-on-year basis.
While the gross domestic product grew by 6 per cent in the first quarter of the current fiscal compared to 3.5 per cent in Q1 last year, the trade deficit narrowed down to $3.05 billion in the first quarter from $3.73 billion in Q1 last year. The Centre managed to improve its fiscal deficit too which stands at 2.17 per cent of the GDP as on August-end this year compared to 2.45 per cent last August.
According to the quarterly growth estimates released by the Central Statistical Organisation today, the GDP at constant (1993-94) prices was Rs 3,11,867 crore in April-June 2002-03 as against Rs 2,94,299 crore in Q1 in 2001-02.
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The Q1 rebound was mainly on account of the manufacturing sector which grew 3.8 per cent compared to 2.7 per cent in Q1 last fiscal.
On the fiscal deficit front, the Centre actually managed to shore it up in August compared to the previous month. The fiscal deficit is less than 2.33 per cent of GDP which it had touched at the end of July, 2002. On a year-on-year basis, the fiscal position improved with the deficit at 40.9 per cent of the budget target or Rs 55,496 crore compared to August 2001, when it was 48.2 per cent.
The narrower trade deficit was bouyed by healthy software exports, which helped the country post a surplus of $ 325 million in its current account in the first quarter ended June 2002, according to the Reserve Bank of India data on the country's balance of payments (BoP). Tthe surplus has been logged for the third successive quarter in a row with the balance of payments surplus widening to $1.67 billion from $1.46 billion, boosted also by higher foreign direct investments and expatriate inflows.
The GDP growth in the next three quarters is, however, expected to be lower.
This will be on two counts, say economists. One will be the base effect since the first quarter growth in the previous fiscal was much lower than in the other three quarters which explains the higher Q1 growth this year.
Also the impact of low rainfall and poor agricultural production will be felt in the growth figures of the next two quarters which might pull down the average growth for the year. Assocham's newly elected president RK Somany said,