India's GDP beats expectation; grows by 9.3%

A healthy growth in manufacturing and services coupled with a rebound in the farm sector propelled the Indian economy to 8.4 per cent growth in 2005-06, as compared to 7.5 per cent in the previous fiscal.

The 8.4 per cent growth is higher than earlier estimates of 8.1 per cent GDP growth during 2005-06.

As per the revised estimates by the Central Statistical Organisation (CSO), the GDP grew by 8.5 per cent in the first quarter of FY'06, 8.4 per cent in the second quarter, 7.5 per cent in the third and 9.3 per cent in the fourth quarter.

Agriculture sector growth bounced back to 3.9 per cent from 0.7 per cent in 2004-05, bringing the government closer to achieving its target of four per cent growth.

Strong performance

Manufacturing and services sector continued to post strong performance during the year, which was blotted only by a decline in mining and social services.

"Agriculture sector has shown improvement. The revision in farm growth is not unusual," said Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The economy is on the path to sustained high-growth trajectory, he said, adding there were no signs of overheating and all macro indicators were in reasonably okay shape.

The manufacturing sector grew by nine per cent from 8.1 per cent and construction by 12.1 per cent as against 12.5 per cent in 2004-05.

Electricity, gas and water supply improved marginally to post 5.3 per cent growth in the financial year ending March 31, 2006 as against 4.3 per cent in the previous fiscal.

Ahluwalia said the power sector remained an area of concern. Rising oil prices could also affect the economy, he said.

"Further, high-growth cannot be sustained on the back of services alone," he said, adding manufacturing would have to be given greater thrust.

National Income

In rupee terms, GDP at factor cost at constant prices stood at Rs 25,95,339 crore.

National income is estimated at Rs 23,25,282 crore during 2005-06, a rise of 8.6 per cent over that of 2004-05. Per capita income in real terms during 2005-06 rose 6.9 per cent to Rs 21,005.

Farm sector during the fourth quarter in 2005-06 posted a robust growth of 5.5 per cent as against a dismal 1.5 per cent in the same period previous fiscal.

This was one of the main reasons for the GDP growth of 9.3 per cent growth in fourth quarter last fiscal compared to 8.6 per cent in the year-ago period.

Besides farm sector, electricity, gas and water supply improved by 6.1 per cent, compared to 1.4 per cent a year ago.

Manufacturing grew by 8.9 per cent in the fourth quarter; construction by 12 per cent; trade, hotels and transport by 12.9 per cent; financial services, insurance, real estate by 10.5 per cent, mining by 3.0 per cent and social and community services by 7.6 per cent. (PTI)