The Hindu : Business : GDP growth soars to 9.4 p.c. in 2006-07

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Friday, Jun 01, 2007
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GDP growth soars to 9.4 p.c. in 2006-07

Ashok Dasgupta

India now a trillion-dollar economy

NEW DELHI: Buoyed by spectacular performances by manufacturing and certain services sectors, the economy ended 2006-07 with a growth of 9.4 per cent, exceeding the earlier projection of 9.2 per cent.

Coming as it did on the back of a high growth base of nine per cent in 2005-06, so robust were the performances of these two dependable sectors that they not only made up for the slowdown in construction and agriculture but also helped the economy achieve the fastest growth rate in 18 years, next only to the 10.5 per cent GDP (gross domestic product) expansion clocked in 1988-89.

Higher growth path

Enthused by the sterling show, as revealed by the Central Statistical Organisation (CSO) data released here on Thursday, Finance Minister P. Chidambaram maintained that the economy had clearly shifted to a higher growth trajectory and a high nine per cent growth was possible this fiscal also.

With this, aided by the high growth along with a strengthening rupee in the forex market, the economy has graduated to a trillion dollar one, the 12th such nation globally to reach this milestone. As per the CSO data, the economy at market prices stood at Rs. 41,25,724 crore at the end of 2006-07 which, at the current exchange rate of the rupee at 40.72 to a dollar, is equivalent to nearly $1,010 billion.

As for the negatives, the overall economic growth, as measured by the GDP at factor cost, slowed down to 9.1 per cent during the fourth (January-March) quarter of 2006-07 as compared to the 10 per cent growth achieved during the same quarter in the previous fiscal.

Pulling it down were sectors such as agriculture, construction, financial, and social services. For the year as a whole, however, the growth in manufacturing and some services more than made up for the slowdown in these other sectors.

While manufacturing grew 12.3 per cent in 2006-07 as compared to 9.1 per cent in the previous fiscal, trade, hotels, transport and communication services grew 13 per cent as compared to 10.4 per cent a year earlier.

Mining and quarrying also grew 5.1 per cent during the year as against 3.6 per cent a year ago.

In absolute terms, the country's GDP stood at Rs 28,48,157 crore during 2006-07 as against the earlier estimate of Rs 28,44,022 crore. The per capita income stood at Rs 22,483 during 2006-07 as compared to Rs 20,734 in the previous fiscal.

In effect, the income of an Indian, on an average, increased by 8.4 per cent in real terms (based on 1999-2000 prices).

However, if inflation is not taken into account, the per capita income stands increased by 14.3 per cent to Rs 29,382 in 2006-07 as against Rs 25,716 in the previous year.

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