India's economy grows 9.4% in 2006/07

NEW DELHI, Friday: The Indian economy grew 9.4% in 2006-07, the fastest in 18 years, on the back of an impressive performance by services and the manufacturing sector. Rival China grew higher at 10.7% in 2006.

Services posted a healthy 11% clip, up from 9.8% the previous year. The manufacturing sector grew 12.3% against 9.1% in 2005-06, data released by the Central Statistical Organisation (CSO) on Thursday showed.

The agricultural sector, however, grew only 2.7% in 2006-07, from over 6% in the previous fiscal. Rising interest rates pulled down the construction sector growth rate to 10.7% from 14.2% in 2005-06.

The scorching pace of GDP growth has catapulted India into the elite trillion-dollar club of a dozen economies. The GDP value at market prices stood at Rs. 41,25,724 crore, equivalent to nearly $101 trillion at the current exchange rate. The market capitalisation of Indian stocks also crossed the trillion-dollar mark three days ago. Reacting to the strong GDP numbers, the benchmark Sensex jumped 133 points to close at 14,544 on Thursday.

The latest CSO estimate of 9.4% beats the organisation's own earlier projection of 9.2% and the Reserve Bank of India's 8.5%. It is next only to the 10.5% GDP expansion achieved in 1988-89.

Finance minister P. Chidambaram at a media briefing here said higher the growth rate, the more inclusive it would be. "High growth is the way forward to eradicate poverty, generate quality jobs and improve human development indicators," he said.

The figures are particularly impressive since they are based on the high base of 2005-06 when the economy grew 9%. In absolute terms, the GDP stood at Rs. 28,48,157 crore in 2006-07 against Rs. 28,44,022 crore estimated earlier. Chidambaram said the government's aim would be to maintain a growth rate of more than 9%.

While the GDP grew 9.4%, the income of an Indian on an average grew only 8.4% in real terms (based on 1999-2000) prices. Per capita income stood at Rs 22,483 in 2006-07 against Rs 20,734 the previous fiscal. Mining and quarrying grew 5.1% in 2006-07 against 3.6% the previous fiscal. Electricity, gas and water supply registered 7.4% growth against 5.3%.

Courtesy: Financial Express