JOIN USEconomy clocks 7.9 pc growth
This impressive performance of the Gross Domestic Product (GDP) in the second quarter is primarily due to improved performance of the industry and service sectors, according to the data released by the Planning Commission on Monday.
Cumulatively, the economy posted a growth rate of 7 per cent in the first half of the current fiscal (April-September, 2009), giving rise to hopes that the annual economic growth rate during 2009-10 could be higher than 7 per cent.
The improved performance compared to 7.7 per cent in the corresponding period of the previous fiscal also reflects a revival in the cycle of demand due to the positive impact of stimulus packages unveiled by the Central government last year to combat the ripple effects of global meltdown.
The growth rate of nearly 8 per cent in the second quarter is being considered remarkable despite a poor performance in the crucial agro sector due to weak monsoon and a decline in export due to contraction of demand for merchandise overseas.
An elated Finance Minister Pranab Mukherjee expected the economy to grow around 7 per cent in the current fiscal. “I am quite hopeful that if this trend continues, we will have a higher GDP growth than anticipated. I hope it will be around 7 per cent,” he told newspersons.
Planning Commission Deputy Chairman Montek Singh Ahluwalia indicated in the light of second quarter GDP figures that the economic growth rate for the current fiscal might have to be revised upward.
Analysis of the latest quarterly GDP data shows that the key manufacturing sector grew by an impressive 9.2 per cent in the July-September period compared to 5.1 per cent in the corresponding period of the last fiscal. Similarly, mining and quarrying grew by a robust 9.5 per cent as against a poor 3.7 per cent in the second quarter of 2008-09.
In this context, FICCI President H S Singhania said: “The latest GDP figures are a further confirmation of the Indian economy recovering. The manufacturing growth rate is once again on an upward drive and it is important to sustain this growth.”