A sharp upward revision in farm sector growth helped the Indian economy grow 9 per cent in 2007-08 against the earlier estimate of 8.7 per cent, the third consecutive year it has touched this figure. At Rs 47,13,148 crore, the revised estimate for gross domestic product (GDP) at market prices establishes India as a trillion-dollar economy.
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However, the revised estimates "" one of five iterations for India's national income data "" released today by the Central Statistical Organisation, confirmed what experts have been expecting: the economy is slowing.
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Both manufacturing and electricity showed sharply slower growth and, overall, industry grew 8.5 per cent in 2007-08 against 11.0 per cent in 2006-07.
(All figures in %, y-o-y growth) | 2005-06 (PE) | 2006-07 (QE) | 2007-08 (AE) | 2007-08 (RE) | GDP growth | 9.4 | 9.6 | 8.7 | 9.0 | Agriculture, forestry & fishing | 5.9 | 3.8 | 2.6 | 4.5 | Mining & quarrying | 4.9 | 5.7 | 3.4 | 4.7 | Manufacturing | 9.0 | 12.0 | 9.4 | 8.8 | Electricity, gas & water supply | 4.7 | 6.0 | 7.8 | 6.3 | Construction | 16.5 | 12.0 | 9.6 | 9.8 | Trade, hotels & restaurants | 9.4 | 8.5 | 12.1 | 12.0* | Transport, storage & communication | 14.6 | 16.6 | n.a. | n.a. | Financing, insurance, real estate & business services | 11.4 | 13.9 | 11.7 | 11.8 | Community, social & personal services | 7.2 | 6.9 | 7.0 | 7.3 | *In the revised estimates for 2007-08 released today, the CSO has continued with the system of combining the data for the "Trade, hotels, transport & communication" sector under one head. It had done so in the Advanced Estimates for 2007-08, released on February 7, 2008. Earlier this two categories """Trade, hotels and restaurants" and "Transport, storage and communication" - were kept separate. Note: National income data has five iterations: AE: Advance Estimates ; RE: Revised Estimates; QE: Quick Estimates; PE: Provisional Estimates; FE: Final Estimates |
The first estimates for the fourth quarter of 2007-08 also reflected this, with GDP growing 8.8 per cent against a blistering 9.7 per cent in the same period of 2006-07.
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The data prompted Finance Minister P Chidambaram to maintain that there is no widespread slowdown. But experts say the tight monetary regime, high inflation, soaring crude prices and problems in the global financial sector will put pressure on growth in the current fiscal year.
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Both investment bank Goldman Sachs and the International Monetary Fund (IMF) expect GDP growth to slow to 7.8 per cent in 2008-09.
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"What one can see clearly is that manufacturing is slowing in a gradual manner, confirming what we have seen in the index of industrial production figures," said Joshua Felman, IMF's senior resident representative in India.
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On his part, Chidambaram admitted that the current fiscal will be a more difficult one than 2007-08 owing to high crude oil prices. "But I am confident that we will maintain the growth rate. We will have a growth rate of not less than 8.5 per cent, and with some luck we will be able to maintain my track record of 9 per cent," he said.
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The finance minister added that the average gross domestic product growth rate for the four years of the United Progressive Alliance government is about 8.9 per cent.
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Chidambaram also said the government will address the slowdown in manufacturing. "We will have to take some corrective measures," he added.
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Meanwhile, per capita income at constant prices increased 7.8 per cent in 2007-08. "More money is available in the hands of the people. Per capita income is rising, it is a very good sign," Chidambaram commented. |
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