Govt sees 8.1% GDP growth in 2003-04

The quarterly review of the economy, released by the finance ministry yesterday, says the 8.1 per cent growth rate of the gross domestic product for the current fiscal bears testimony to the emerging fundamental strength and resilience of the economy.

Sounding a bullish note, the quarterly review says a combination of moderate inflation, capital inflows, soft interest rates, good corporate performance and healthy capital markets "augur well for the prospects of the economy".

It also indicates that the actual growth rate of the GDP could be higher than the advance estimates of 8.1 per cent for 2003-04, released by the Central Statistical Organisation. It says national accounts data shows the real GDP growth for the third quarter of 2003-04 is 10.4 per cent, which is even higher than that recorded in the second quarter.

The ministry has to issue quarterly reviews in line with its statutory obligation under the Fiscal Responsibility and Budget Management Act.

The review says even at the conservative rate of 8.1 per cent, the growth rate is more than double the 4 per cent growth recorded by the economy in 2002-03.

The quarterly review notes that the rally in stock prices during the first nine months of the fiscal has continued on the strength of buoyant foreign investment flows and excellent results posted by the India Inc. This has been aided by non-food credit growth, which after being sluggish for the first two quarters, has picked up in the third quarter and is 42 per cent more compared with the corresponding period of 2002-03.

The review says the higher growth rate will be achieved on the basis of a robust agriculture growth as food grain production is slated to touch 212.2 million tonnes this year. As a result, the review adds that there is significant improvement in the fiscal deficit at Rs 92,435 crore during the April to December period.

On the external sector, it says exports grow by 13.5 per cent, while imports surge by 24.9 per cent during the first nine months of 2003-04. It has also highlighted the surge in foreign exchange reserves by $25 billion this fiscal, to cross $100 billion by December 2003.

On the revenue front, gross tax collection of Rs 1,64,170 crore up to December 2003, is 12 per cent higher than the previous fiscal's mop up of Rs 1,46,192 crore.

Direct taxes surge by 30 per cent, while indirect taxes grow by 9.0 per cent during the first nine months of the last fiscal.

The pilot cash management scheme introduced in the nine central ministries introduced in 2003-04, has also shown encouraging results with none of the ministries exceeding the projected requirements in the first three quarter. Of the lot, the agriculture and cooperation ministry has fared the worst with an utilisation rate of 49 per cent of the projected requirement for the April to December period.