Macro parametres are glowing, moment to savour: FM

New Delhi, Nov 29 (UNI) Finance Minister P Chidambaram today expressed utmost satisfaction at the GDP figure of 9.2 per cent released here for July-September (Q2), 2006, adding that the other macro-economic parametres were glowing too, even though inflation was a cause of concern.

Giving his reaction at a press conference on the GDP figures for Q2 made public, Mr Chidambaram expressed optimism that the UPA government will be able to meet the stiff targets outlined in the Fiscal Responsibility and Budget Management (FRMB) Act due to the tax buoyancy and expenditure control measures.

"This is a moment to savour", he remarked.

The Finance Minister said he was worried about slightly higher inflation rate, which was mainly due to supply side constarints, but he was confident it would be tamed. The arrival of new sugar stocks soon and new wheat stocks next year would act as a dampener on inflationary expectations, he said.

He said the fiscal deficit between April and October stood at Rs 87,100 crore, or was 58.6 per cent of the full year Budget target.

"The tax collection during this period is better and the government is on track to meet the fiscal deficit target for the year to March 2007." Mr Chidambaram said the growth rate in first six months of this fiscal was 9.1 per cent, the highest ever on a six monthly basis.

He said there were only two years when the quarterly growth rate was higher than the Q2 GDP figure of 2006. These were 9.3 per cent in 2005-06 and 11.3 per cent in 2003-04. The Finance Minister,however, noted that the high figure 11.3 per cent was on a low base of 1.5 per cent.

Mr Chidambaram took stock of the fact that the higher growth rate was on account of rapid growth in services and manufacturing, but expressed disappointment at the agricultural growth rate which grew at 1.7 per cent in Q2, compared with 3.4 per cent growth in April- June, 2006.

Agriculture accounts for about 23 per cent of GDP. Manufacturing output, which accounts for nearly 25 per cent of GDP, expanded by an annual growth rate of 11.9 per cent, faster than the growth rate of 11.3 per cent in April- June, 2006.

Services grew at 10.9 per cent in Q2 2006 compared to 10.6 per cent in Q1 of the same year.

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