Chidambaram says India's GDP growth driven by reforms

New Delhi, Feb 7 (UNI) Finance Minister P Chidambaram today expressed happiness at the robust projections for the Indian economy, estimated at 9.3 per cent for 2006-07, saying it was ''reforms that are driving growth.'' ''Reforms have brought in investment, fostered competition and enhanced productivity and efficiency,'' he said in his reaction to the advance estimates of national income for the financial year 2006-07, released by the Central Statistical Organisation here today.

Mr Chidambaram reiterated that the Government will continue to accord the highest priority to investment -- domestic and foreign, public and private -- across all sectors.

Regarding the manufacturing sector, which was the main driver of growth, which was expected to grow at 11.3 per cent, the Finance Minister said, ''In the three years of the UPA Government, growth rate in manufacturing has accelerated from 8.7 per cent to 9.1 per cent and further to 11.3 per cent.'' The services sector -- slated to post 11.2 per cent growth -- had also contributed to the impressive growth figures. In the past three years, the services sector had inched upwards to 9.6 per cent, 9.8 per cent and 11.2 per cent, respectively.

''Here too there has been an acceleration from year to year,'' he noted.

Even within the services sector, double-digit growth rates were seen in 'trade, hotels, transport and communication' and 'financing, insurance, real estate and business services' industries, he said, adding that the GDP figures were ''particularly gratifying'' based as they were upon a base year growth of 9.0 per cent recorded in 2005-06.

On the dismal agriculture sector performance, estimated at 2.7 per cent, he said, although this was lower than the desired growth rate of 4.0 per cent, it was due to the base year (2005-06) having a high growth rate of 6.0 per cent.

Similarly, the per capita income in real terms in 2006-07 put at 7.9 per cent compared to 7.4 per cent in the previous year was ''another satisfactory feature of the estimates.'' Mr Chidambaram said ''growth is a function of investment; and investment is facilitated by flexible, timely and progressive policy responses in a dynamic and competitive global economy.'' The positive economic performance was now fuelling investment in crucial social sectors like education, health, child care and employment guarantee programmes and ''hence, the importance of maintaining high growth rates cannot be overemphasised,'' he said.

UNI