During the final quarter of 2006-07, India's
real gross domestic product (GDP) decelerated to 9.1%
from 10% during the same quarter of the preceding fiscal,
according to the latest data released by the Central
But the growth rate is still robust and
more importantly, it is the manufacturing sector that
is calling the shots. For the year as a whole, the economy
expanded at the rate of 9.4%, compared with 9% in 2005-06.
This rate is also higher than the growth of 9.2%, anticipated
in the advance estimates released by the CSO.
With the growth juggernaut maintaining
a strong momentum, the per capita income is also sharply
up 14.3% to Rs 29,382 last year. This is on top of a
spurt of 12.1% in 2005-06. Even adjusted for inflation,
the trend in per capita national income is gratifying.
It rose by 7.4% and 8.4% during the last two years (at
According to CSO, the modest slide in
GDP growth rate in the final quarter of 2006-07 vis-à-vis
the year ago period was on account of a poor showing
in agriculture - the growth rate here had slackened
to 3.8% from 6.2% - and in construction to 11.2% from
16.1%. Assorted financial services and business, community
and social services also witnessed a slowdown of sorts.
But this was partially offset by a commendable show
by manufacturing, which jumped to 12.4% from 9.4%, helped
by an improved performance from mining and quarrying,
electricity and trade, hotels etc.
However, these estimates are very tentative
and are subject to revision in the light of more data
pertaining to the last quarter of 2006-07 becoming available
in the due course. Therefore, it should be taken as
indicative rather being definitive. For example, many
figures for the previous quarters have been modified
in the latest data released by the agency.
The GDP growth for the first quarter of
the last fiscal has been reworked to 9.6% from the earlier
8.9%, for the second quarter to 10.2% from 9.2% and
for the third quarter to 8.7% from 8.6%. In the case
of manufacturing, the revision has been substantial
- to 12.3% from 11.3% in the first quarter, to 12.7%
from 11.9% in the second quarter and to 11.8% from 10.7%
in the third quarter.
India seems to be entering a phase of
manufacturing -led GDP growth. In 2005-06, GDP rose
by 9% while manufacturing rose by 9.1%. In the advance
estimate for 2006-07, the rise in real GDP was envisaged
at 9.2% of which manufacturing was projected to increase
its GDP by 11.3%. But revised estimates, now available,
indicate that the performance has been more flattering
than earlier indicated; a 9.4% surge in GDP propelled
by manufacturing. During the first three years of the
new millennium, India had fared poorly with GDP growth
ranging between 3.8% to 5.8%.