JOIN US"Yes, if the high IIP growth continues...if it stays in the double digit in all the months to follow...the likelihood (of double-digit) is pretty good," Sen said when asked whether advance growth estimates may be revised upwards.
The Central Statistical Organisation (CSO), in its advance estimate has projected 7.2 per cent GDP growth rate for the current fiscal. This is less than 7.5 per cent growth forecast by RBI and 7.75 per cent pegged by the Finance Ministry in mid-term economic review.
Finance Minister Pranab Mukherjee and Prime Minister's Economic Advisory Council have pegged economic growth at 7.5 per cent for this fiscal from 6.7 per cent in the last fiscal.
Prime Minister Manmohan Singh had also said the economy is likely to grow by 7.5 per cent this fiscal.
Industrial production surged to a 16-year high of 16.8 per cent in December 2009, against the contraction of 0.2 per cent in the same month a year ago, driven by a robust performance by the manufacturing sector, particularly consumer durables.
However, the advance data were for December was released before the industrial production.
Sen said the GDP projection was calculated in the advance estimate based on the relatively weak industrial output number. "...what we have done in the advance estimate is that we projected the last quarter. That is on the strength of relatively weak IIP in the first 8 months," Sen said.
Advance estimates are based on actual economic growth numbers for the first half, partial figures for the third quarter and total projection for the fourth quarter.
Economic growth stood at 6.1 per cent in the first quarter and stunning 7.9 per cent in the second quarter, totalling to seven per cent economic growth for the first half.
It is this economic growth, besides industrial figures for two more months and some other figures that CSO had considered for advance estimates.
For the first nine months, industry grew by 8.6 per cent against 3.6 per cent a year ago. Fiscal 2009-10 started with just 1.12 per cent industrial growth and the figures remained in single digits till July.
CSO comes out with advance estimates to enable the Finance Ministry calculate various figures like fiscal deficit.
On Friday, PMEAC Chairman C Rangarajan said economic growth is likely to be marginal higher than CSO's estimates of 7.2 per cent and is likely to touch 7.5 per cent.
CSO estimated farm production to contract by 0.2 per cent, but PMEAC expects this growth to be slightly higher. Besides, it expects industrial and services growth to be stronger this fiscal.