Economy posts 6.1% Q1 growth

Corporate India sees signs of turnaround

The growth rate of Gross Domestic Product (GDP) during April-June 2009 is being considered to be the highest ever since the global slowdown hit the Indian economy in September last year.

But comparatively the 6.1 per cent growth rate of the economy during first quarter of the 2009-10 is lower as against 7.8 per cent in the corresponding period of the previous fiscal 2008-09.
However, analysts say the GDP rate of the first quarter of 2009-10 makes India the second fastest growing economy among major countries after China, which posted 7.9 per cent growth in April-June this year. At the same time economists apprehend in view of an impending drought like situation in the face of weak monsoon the revival of the economy may get a sever jolt if the growth rate in the crucial agricultural sector drops significantly. 

The GDP data released by Central Statistical Organisation (CSO) shows that despite poor performance in crucial sectors like manufacturing and agriculture, growth rate improved primarily because of good performance in the mining, electricity and financing sectors. The key manufacturing sector declined to 3.4 per cent against 5.5 per cent while agriculture sector posted a growth rate of 2.4 per cent compared to 3 per cent in the first quarter of 2008-09.  Electricity generation and mining output showed the best performance  growing by 6.2 per cent and 7.9 per cent respectively in the first quarter of this fiscal as against 2.7 per cent and 4.6 per cent in the corresponding period of previous fiscal. 

Worst hit sectors
The worst hit sectors were trade, hotels, transport and communication recording a low growth rate of 8.1 per cent in the first quarter this fiscal compared to 13 per cent a year ago.

However, welcoming the first quarter GDP growth figures top policy makers of the government say the growth is in line with the RBI and the government’s expectations, which project the growth rate of the economy to six per cent with an upward bias in the current fiscal. “The worst appears to be over and we hope to see improved performance in (economy) in coming quarters. The GDP numbers (for the first quarter) is very good. It is consistent with what we are projecting,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
Finance Secretary Ashok Chawla said “growth in the economy is very encouraging and it is expected to improve further.”
Ficci President Harsh Pati Singhania said “this growth on a sequential basis from 5.8 per cent in the fourth quarter of 2008-09 to 6.1 per cent in the first quarter in 2009-10 is an indication of a turnaround in the economy.”
CII Director General Chandrajit Banerjee said “the Indian economy has emerged from the disruption created by the global financial crisis. It seems an economic recovery is on the cards.”