Says the growth to accelerate in the second half of the fiscal
The first quarter of this fiscal witnessed a real GDP growth of 7.9 per cent, which is expected to accelerate further in the second half, said a Centre for Monitoring Indian Economy (CMIE) report in its September monthly review.
The growth rate of the agriculture, industry and services sectors in the first quarter of the current fiscal was 3 per cent, 6.9 per cent and 10 per cent, respectively, CMIE said.
However, all the sectors recorded lower growth than the corresponding period a year ago with industry being hit the worst by the slowdown, CMIE said. “Within industry, the mining and construction sectors reported healthy acceleration in growth,” it added.
Mining growth accelerated from 1.7 per cent in the previous year to 4.8 per cent in this year while the construction industry grew by 7.7 per cent, as against 11.4 per cent in the year-ago period.
The manufacturing and utilities sectors saw a serious slowdown.
“Growth in manufacturing slowed to 5.6 per cent in the first quarter of 2008-09 from the 10.9 per cent growth registered in the first quarter of 2007-08,” CMIE said.
The April-June period was the second consecutive quarter with a below-six per cent growth in the manufacturing sector.
The services sector saw a small slowdown in growth in the first quarter due to fall in the financial sector, trade, hotels, transport and communication sectors, CMIE said.
Estimates for trade, hotels, transport and communications sectors have been revised a tad upwards to 10.7 per cent from 10.6 per cent.
“Individually, these make only a marginal difference to the GDP forecast. And on a net basis, they leave our forecast unchanged at 9.4 per cent,” CMIE said.
However, the official GDP growth estimates are based on a seriously-flawed Index of Industrial Production (IIP), CMIE said.
“If the IIP problems are not fixed, the industrial growth in the GDP would turn out to be lower than our forecast. This lower bound of real GDP growth (with a flawed IIP) in 2008-09 is 9.2 per cent,” it added.
