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 Statistical
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 1999-00 prices).
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,
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 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%.