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New Delhi: Spurred by a turnaround in factory output, India on February 8 forecast its economic growth for this fiscal at 7.2 per cent, against 6.7 per cent achieved in the previous fiscal, despite a 0.2 per cent decline predicted in the farm output.
The advance estimates of the country's gross domestic product released by the Central Statistical Organisation (CSO) forecasts a growth of 9.9 per cent in services and 8.9 per cent in manufacturing - the highest among the eight broader economic activities.
Mining and quarrying comes next with an 8.7 per cent expansion followed by 8.3 per cent for trade, hotels, transport and communications, and 8.2 per cent each for energy and water, and social and community services.
The per capita income in real terms is also likely to expand 5.4 per cent to Rs.33,540, compared to Rs.31,821 in the previous fiscal, said a statement from the agency, under the Ministry of Statistics and Programme Implementation.
"These advance estimates are based on anticipated level of agricultural and industrial production, analysis of budget estimates of government expenditure and the performance of sectors like railways, transport, communication, banking and insurance available so far."
The projection by the CSO is lower than that forecast by the finance ministry at 7.75 per cent and the central bank's own recent estimate of 7.5 per cent, but industry has by and large concurred with the latest assessment. "The 7.2 per cent growth during 2009-10, against 6.7 per cent last year shows a remarkable turnaround," said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).
"The negative blow from agriculture has been somewhat muted since the slippage is not as deep as predicted earlier. On the whole, the figures reveal a very robust picture of the Indian economy and growth," Mitra added. "It is also important to maintain the policy framework in order not to throttle the spontaneous growth momentum that the economy is demonstrating currently," he said, perhaps wanting the stimulus package announced since December 2008 to continue.
The Associated Chambers of Commerce and Industry (Assocham) said the farm sector will remain under pressure not only in current fiscal but also the next as not much was happening in terms of application of technologies to improve farm growth.
The percentage growth under the eight categories of business activities for this fiscal are as under, with figures for previous fiscal in brackets:
- Overall gross domestic product: 7.2 (1.6)
- Agriculture, forestry and fishing: -0.2 (1.6)
- Mining and quarrying: 8.7 (1.6)
- Manufacturing: 8.9 (3.2)
- Electricity, gas and water supply: 8.2 (3.9)
- Construction: 6.5 (5.9 )
- Trade, hotels, transport and communication: 8.3 (7.6)
- Financing, insurance, real estate business services: 9.9 (10.1)
- Community, social and personal services: 8.2 (13.9)
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