Confirming the fact that the
Indian economy has come
out of the global blues faster,
GDP at factor cost expanded
8.8 per cent during the first
quarter of the current fiscal,
speeding from 8.6 per cent in Q4,
6.5 per cent in Q3 and 6 per cent in
Q1 of 2009-10. Taking into
account inflation effects, the
growth worked out to 21.7 per cent
at current prices. The total domestic
market, as indicated by GDP at
market prices, increased by 10 per
cent at constant prices in terms of
CSO's "corrected" press note, and
24.8 per cent at current prices.
The feat also ensured that the
country remained one of the fastest
growing economies in the world.
By the way, CSO had to issue the
corrected press note on GDP numbers
as serious errors were found in
the data released earlier.
The economic performance
was powered by manufacturing
that grew 12.4 per cent at constant
prices, three times the rate a
year ago, and trade, hotels, transport
and communication that
climbed 12.2 per cent, twice the
pace a year ago.
Among other sectors, farm
incomes grew 2.8 per cent against
1.9 per cent in Q1 and stagnation
over 2009-10. Banking, insurance,
financial services etc.
expanded 8 per cent (11.8 per
cent). Community, personal and
social services increased 6.7 per
cent (7.6 per cent).
Government final consumption
expenditure (corrected) slowed
from 15.3 per cent to 14.2 per cent,
while revised private final consumption
expenditure indicated a
climb in the rapidity from 2.9 per
cent to 3.8 per cent.
Untitled Document
GDP during Q1 at 2004-05 prices |
|
`billion |
% Increase |
|
2009-10 |
2010-11 |
2009-10 |
2010-11 |
Agriculture, forestry & fishing |
1,549 |
1,592 |
1.9 |
2.8 |
Mining & quarrying |
252 |
274 |
8.2 |
8.9 |
Manufacturing |
1,643 |
1,847 |
3.8 |
12.4 |
Electricity, gas & water supply |
217 |
231 |
6.6 |
6.6 |
Construction |
863 |
928 |
4.6 |
7.5 |
Trade, hotels, transport & communication |
2,736 |
3,070 |
5.5 |
12.2 |
Financing, insurance, real estate & business services |
1,865 |
2,015 |
11.8 |
8 |
Community, social & personal services |
1,286 |
1,372 |
7.6 |
6.7 |
GDP at factor cost |
10,409 |
11,328 |
6 |
8.8 |
GDP by major sectors |
Agriculture, forestry & fishing |
1,549 |
1,592 |
1.9 |
2.8 |
Industry |
2,974 |
3,279 |
4.6 |
10.3 |
Services |
5,887 |
6,457 |
7.9 |
9.7 |
Figures may not add up to total |
The investment side of the economy
seems to have suffered a setback
in Q1. Thus, real income in the
construction industry expanded
7.5 per cent which, though substantially
higher than 4.6 per cent in this
quarter a year ago, was lower than
9.8 per cent in this period two years
back. On a sequential basis, the
construction incomes declined 3
per cent, against 2 per cent in this
quarter of 2009-10 and 1 per cent in
the quarter two years back.
Gross fixed capital investment,
taken from "corrected" CSO data,
indicated 7.6 per cent expansion,
against a decline a year ago: the
rate, however, implied a significant
slowdown from 17.7 per cent in Q4
and 8.8 per cent in Q3 of 2009-10.
Whereas the performance for
Q1 looks promising, concerns
remain about its sustainability.
Thus, July, the first month of the
second quarter, has shown unexciting
infrastructure industries
and a decline in bank credit. This,
together with the likelihood of the
benefits of low-base effects of a
year-ago feat getting eroded in
subsequent quarters, clouds the
prospects of significantly
enhanced industry in near future.
Sobering the outlook for the fiscal
is also the fragility in recovery
in world economy. This would
mean that the Indian economy
cannot hope to get much support
in the form of expanding exports.
Nevertheless, southwest monsoon
has progressed quite satisfactorily
and this should support
a bounce-back in farm sector that
had stagnated in the preceding
fiscal, boost power generation
and several other sectors, and
help bring down inflation that
has goaded RBI into monetary
tightening.