Economy up 8.8 pc in Apr-June, thanks to manufacturing

LD GDP

New Delhi, Aug 31 (PTI) Driven by robust manufacturing,
the Indian economy grew by 8.8 per cent in the first quarter
of this fiscal, the fastest pace in around three years,
despite partial withdrawal of economic stimulus packages.
The growth numbers prompted some industry groups to
forecast that the economy would revert to high expansion mode
of 9 per cent in 2010-11, after two successive years of
slowdown due to the impact of global financial meltdown.
Finance Minister of India Pranab Mukherjee exuded
confidence that the economy would grow at least by 8.5-8.75
per cent during the current financial year.
Manufacturing, which bore the brunt of the slowdown that
began in 2008-09, grew by 12.4 per cent during April-June,
2010, against 3.8 per cent in the same period last fiscal.
Agriculture and allied activities expanded by 2.8 per cent
versus 1.9 per cent, according to the official data released
today.
The Finance Minister said, "...encouraging point is 12.4
per cent growth registered in manufacturing... I am quite
confident about whatever was projected in the economic survey
...that GDP growth will not be less than 8.5-8.75 per cent."
However, there are certain areas of concern, especially
in the services sector, where growth rate moderated.
While finance, insurance, real estate and business
services grew by 8 per cent during April-June this fiscal
against 11.8 per cent in the same period last year, community,
social and personal services expanded by 6.7 per cent against
7.6 per cent.
Despite partial withdrawal of economic stimulus packages,
the growth rate at 8.8 per cent is highest since the last
quarter of 2006-07, when the economy expanded by close to 9.5
per cent.
In a partial roll back of the stimulus, the government
had rolled back excise duty by 2 per cent -- from 8 per cent
to 10 per cent in the last week of February.
While the economy clocked 8.6 per cent growth in the
March quarter, it had registered 6 per cent in the same
quarter last fiscal.
China, the only large country with higher growth rate
than India, witnessed 10.2 per cent growth in the same
quarter ended June 2010.
The numbers however failed to enthuse stock markets,
since the growth rate fell below the expectations of 8.9-9.4
per cent pegged by many economists. BSE benchmark Sensex fell
nearly one per cent to 17,869 points.
"Given this trend in GDP growth, we expect to close the
year with an overall performance of close to 9 per cent,"
Ficci President Rajan Bharti Mittal said.
Assocham President Swati Piramal pegged the growth rate
at 8.6-8.8 per cent. PTI KKS
KAB


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