GDP growth 8.4 pc in 2005-06, 9.3 pc in Q4

New Delhi, May 31: Gross Domestic Product (GDP) grew by a robust 8.4 per cent in fiscal 2005-06, catapulted by a hefty 9.3 per cent growth in the last quarter, with a remarkable recovery of the agricultural sector and encouraging performance by the manufacturing and services sectors.

The revised estimates of National Income released here today by the Central Statistical Organisation (CSO), paint a picture of an economy on the rebound and surpassing official and private estimates of the GDP.

Agriculture in fiscal 2005-06 demonstrated a recovery by registering a growth rate of 3.9 per cent, picking up from a low of 0.7 per cent in 2004-05 and manufacturing maintained its buoyancy with a healthy growth of 9 per cent.

The GDP at factor cost at constant (1999-2000) prices was reivsed upwards to Rs 25,95,339 crore against Rs 25,86,587 crore projected in the Advanced Estimates.

According to the revised estimates, GDP in the first quarter of 2005-06 grew by 8.5 per cent, in the second quarter by 8.4 per cent and third quarter by 7.5 per cent.

In Q4, agriculture grew by 5.5 per cent, manufacturing 8.9 per cent and services maintained their strong momentum with a growth rate of 9.6 per cent.

The surprise in the data was the pick up in farm sector growth, considered essential for sustaining a growth rate of eight per cent plus.

The GDP figures, however, had little impact on the bourses which after opening on a weak note plummeted by nearly 600 points on the Bombay Stock Exchange and closed 388 points lower than yesterday's index.

Finance Minister P Chidambaram, however, attributed the volatility in the stock markets to sales by FIIs buttressed by a meltdown in global markets.

The winner of the piece was 'construction' registering a growth rate of 12.1 per cent in 2005-06. The next highest growth was recorded by 'trade, hotels, transport and communication' with a figure of 11.5 per cent. Other sectors which showed growth rates of more than 5 per cent during the year were 'financing, insurance, real estate and business services' (9.7 per cent), 'manufacturing' (9.0 per cent), 'community, social and personal services' (7.8 per cent) and 'electricity, gas and watersupply' (5.3 per cent).

The robust GDP figures, however, fuelled fears of interest rates moving Northwards and the higher Current Account Deficit was the villain of the story.

Mr Chidambaram discounted the view that the ruling high prices of global crude would impact adversely on National Income, though they could stoke inflation.

Planning Commission Deputy Chairman Monetk Singh Ahluwalia did not think that the CSO data gave credence to an impression of an overheated economy, but said there was substantial scope of expansion of the manufacturing sector if right policies were put in place.

Prime Minister Manmohan Singh has set a target of an annual growth rate of ten per cent per annum and is of the firm view that an average growth rate of four per cent of the agricultural sector is necessary to sustain a high GDP growth.

Mr Chidambaram has stated that the monsoon would be 'good' and analysts say that this meant that agriculture will retain its upward trend.

In terms of growth rates, the national income was estimated to rise by 8.6 per cent during 2005-06, compared to the growth rate of 7.8 per cent in 2004-05.

Per capita income during 2005-06 was at Rs 21,005, a growth of 6.9 per cent over that of Rs 19,649 in 2004-05, the figures said.

UNI