The government Monday said it expects the annual gross domestic product (GDP) to grow at 7.4 percent in the current fiscal under a new method for computing national accounts, thereby resulting in the upward economic growth rate.
"Real GDP at constant (2011-12) prices in the year 2014-15 is likely to attain a level of Rs.106.57 lakh crore, as against the first revised estimate of GDP for the year 2013-14 of Rs.99.21 lakh crore, released on Jan 30, 2015," the central statistics office (CSO) said in its advance estimates of national income 2014-15.
"The growth in GDP during 2014-15 is estimated at 7.4 percent as compared to the growth rate of 6.9 percent in 2013-14," it added.
The CSO, under the ministry of statistics and programme implementation, had shifted base year from 2004-05 to 2011-12, and had come out with the new annual estimate of national income and other macroeconomic aggregates on Jan 30, 2015.
Under the new method, CSO measures GDP by market prices instead of factor costs, to take into account gross value addition (GVA) in goods and services and indirect taxes.
The base year of national accounts was last revised in January 2010.
The CSO had earlier said that following international practices, industry-wise estimates will be presented as gross value added (GVA) at basic prices, while GDP at market prices will henceforth be referred to as GDP.
The CSO has also revised the growth rate for the first half of 2014-15 to 7.4 percent, from the 5.5 percent it had reported earlier under the old method.
At constant prices of 2011-12, the CSO has revised the October-December GDP rate to 7.5 percent.
While the growth rate calculated under the new system for the second quarter has been revised to 8.2 percent, that for the first quarter has been pegged at 6.5 percent.
The CSO said these estimates are based on the anticipated level of agricultural production, index of industrial production (IIP), monthly accounts of union government expenditure and of state government expenditure.
The data furnished by CSO shows that financial, real estate, professional services, trade, hotels, transport, communication and services related to broadcasting, public administration, defence, electricity, gas, water supply and other utility services grew at the rate of over seven percent.
The growth in agriculture, forestry and fishing has been estimated to be at 1.1 percent, mining and quarrying at 2.3 percent, construction at 4.5 percent and manufacturing at 6.8 percent.
Commenting on the data the Confederation of Indian Industry said: "A lot of effort has gone into developing the new GDP series and CII would like to commend the work done by CSO."
"While growth in most sectors is estimated to have picked up from the previous year, there has been deceleration in three sectors: agriculture, mining and trade, hotels, transport and communication. Growth in capital formation still remains weak at 1.3 percent and needs to be strengthened," it added.
Jyotsna Suri, president of industry chamber Ficci, in a statement here said : "We must remember that large segments of the industrial sector are still faced with muted demand, and a sustained increase in GDP requires both investment and consumption demand to move full speed ahead. We are looking forward to the ensuing budget and hope to see more measures by the government to give a boost to the investment cycle."
"With a growth rate of 6.9 percent in FY 2013-14, the April-December FY 2014-15 GDP growth at 7.4 percent suggests that slowdown is behind us and recovery is gaining strong momentum," said Alok B. Shriram, president, PHD Chamber.
