NEW DELHI: The Gross Domestic Product (GDP) is projected to grow at 9.2 per cent during the current fiscal over the back of a healthy nine per cent growth notched up during 2005-06.

According to the advance estimates of national income for 2006-07 released by the Central Statistical Organisation (CSO) here on Wednesday, the overall economic growth of nine per cent for the second year in a row would be possible owing to such buoyant sectors as manufacturing and financial services which have been churning out robust performances during the year.

On a high base

Commenting on the advance estimates, Finance Minister P. Chidambaram, in a statement, said: "[The] Government is happy to note that the estimate of GDP growth at constant prices is 9.2 per cent. This is particularly gratifying because it is upon a base year growth of 9 per cent that has been recorded in 2005-06.''

On the negative side, however, CSO's advance estimates show that growth in the farm sector dipped yet again to 2.7 per cent during the fiscal, after having surged to six per cent in the previous financial year.

Making up for the slide was the manufacturing sector, which witnessed a growth of 11.3 per cent as compared to 9.1 per cent in the year before, even as the construction sector marginally slipped to notch up a growth of 9.4 per cent as against 14.2 per cent earlier.

Insurance does well

Aiding the higher growth were sectors such as financing, insurance, real estate and business services that continued to perform well and posted a growth of 11.1 per cent as compared to 10.9 per cent in 2005-06.

A slight improvement was also recorded by mining and quarry sectors which showed a growth of 4.5 per cent, up from 3.6 per cent during the previous year.

As per the latest data, the GDP at factor cost (1999-2000) prices is expected to touch Rs. 28,44,022 crore in the current financial year as compared to the quick estimates of Rs. 26,04,532 crore for 2005-06. The estimated growth in other sectors such as trade, hotels, transport and communication is placed at 13 per cent.

Referring to the low agriculture sector growth in the current year at 2.7 per cent, Mr. Chidambaram noted that although this was lower than the desired growth rate of four per cent, "it may be noted that in the base year (2005-06) the growth rate was at a high of six per cent.''

Another satisfactory feature of the CSO estimates is that the per capita income in real terms in 2006-07 is estimated to grow at 7.9 per cent as compared to 7.4 per cent in the previous year, Mr. Chidambaram said.

Priority to investment

Satisfied with the anticipated growth in GDP, Mr Chidambaram said: "The Government wishes to reiterate that it is reforms that are driving growth. Reforms have brought in investment, fostered competition and enhanced productivity and efficiency. Government will continue to accord the highest priority to investment — domestic and foreign, public and private — across all sectors.''

"Growth is a function of investment; and investment is facilitated by flexible, timely and progressive policy responses in a dynamic and competitive global economy. High growth has also brought in more revenues... Hence, the importance of maintaining high growth rates cannot be overemphasised,'' he said.

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