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However, compared to the 9.6% growth in the first quarter
of last fiscal, the growth is a bit slow. But because
of the high base produced by last fiscal's Q1 growth,
the 9%-plus Q1 growth this year is still impressive.
The 9%-plus quarterly growth in the gross domestic
product (GDP) comes over the 9.4% expansion during the
last fiscal, the fastest in almost two decades. This
growth has also, at least so far, belied expectations
that higher interest rates and a stronger rupee would
hurt growth in various sectors.
Finance minister P Chidambaram is confident that the
economy would maintain 9% growth in this fiscal and
investments will remain buoyant. "The performance
is quite satisfactory," he said, adding that it
would help in revising the average GDP growth of 8.6%
over the past three years. Earlier, the RBI Reserve
Bank of India had estimated the growth at 8.5-9% during
the fiscal.
ICRA chief economic advisor Saumitra Chaudhury said
that marginal differences would always be there from
quarter to quarter, but the point was the growth rate
was comfortably above 9%. He said post-harvest activities
have reflected in the 3.8% agricultural growth in the
April-June quarter, compared to the 2.8% in the previous
year's corresponding quarter. As per official data released
on Friday, manufacturing sector grew by 11.9% during
April-June this year, marginally lower than 12.3% in
the previous fiscal's first quarter.
The growth momentum was reflected by finance, insurance,
real estate and business services, which grew at 11%
compared to 10.8% in the same period last fiscal.
Agriculture and allied activities grew by 3.8%, higher
than last fiscal's 2.8%. Trade, hotels, transport and
communication grew by 12% compared to 12.4% in the corresponding
period last fiscal. Power, gas and water supply grew
by 8.3% compared to 5.8%. Experts said that if the farm
sector growth remained close to 4%, the growth would
be above 9%.
However, some economists expect growth to become moderate
in the remaining part of the year, bringing the overall
growth rate to about 8%. Crisil director and principal
economist DK Joshi expects manufacturing growth to slow
down, thanks to higher interest costs, even as a good
monsoon would hold up agricultural growth.
Meanwhile, the inflation touched a 15 month low of
3.94% for the week ending Aug 18, much loer than the
5% predicted by the central bank RBI. The rate was 5.12%
in the comparable period last year. It was last measured
below 4% on April 29, 2006. January 31 this year saw
it reach the recent high of 6.7%.
Source: Economic Times http://economictimes.indiatimes.com
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