Indian Economy: Growth -3

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[url="http://www.hindustantimes.com/Recovery-on-track-GDP-to-grow-at-7-2-per-cent/H1-Article1-506703.aspx"]Recovery on track: GDP to grow at 7.2%[/url]

The GDP forecast put out by the Central Statistical Organisation (CSO), however, is a shade lower than projections by the Reserve Bank of India (RBI) and the Finance Ministry.

The ministry, in its mid-term review of the economy in December, had pegged the current year’s growth at 7.75 per cent while RBI had projected the economy to grow at 7.5 per cent.

“This is an advance estimate,” finance secretary Ashok Chawla said. “What we normally see when the final numbers come out for the third and fourth quarters (in May) is an upward bias and we are sure that the same is going to happen this year too.”

The latest data could set the tone for withdrawal of stimul-us measures announced last year to counter the downturn. All eyes will be on Budget 2010, to be presented later this month.

“In terms of what the future policy framework is going to be, I think you will have to wait for the budget,” Chawla said.

The bad news: agricultural production is expected to shrink by 0.2% as a result of last year’s drought.

Growth of the Indian economy slowed to 6.7% in 2008-09 after growing at close to 9% for four straight years before the meltdown hit home in September 2008.



A Chinese official said India had the potential to overtake China as the world’s fastest growing economy. China’s GDP grew by 8.7 per cent in 2009.

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)

Are they making inflation adjustment? If not, then actual adjusted GDP should be less.