The Hindu Business Line : Powered by manufacturing, services sectors

THE Indian economy has registered a healthy growth rate of 5.7 per cent during the first quarter of the current fiscal, over and above the 5.3 per cent figure for the corresponding period of 2002-03.

What is particularly encouraging about the 5.7 per cent first quarter real gross domestic product (GDP) growth figure is that it does not account for the impact of this year's munificent monsoon rainfall.

On the contrary, agriculture growth for April-June 2003 has dipped to 1.7 per cent, from the previous year's corresponding level of 2.7 per cent. The 1.7 per cent figure is largely reflective of last year's drought, said to have been the worst in the last three decades.

Since the 2002-03 agricultural year extends from July 2002 to June 2003, the 1.7 per cent growth recorded by the farm sector during April-June 2003 basically captures last year's poor rabi harvest.

According to the Agriculture Ministry, output of rabi rice, wheat, coarse cereals and pulses fell by 30.9, 3.5, 13.2 and 10.2 per cent, respectively. Similarly, oilseeds also registered negative growth rates of 13.7 per cent during the 2002-03 rabi season.

The impact of this year's good monsoon rains — in terms of higher farm incomes and increased spending in rural areas — will be felt mainly during the third and fourth quarters of 2003-04.

The Agriculture Ministry has already, in its first `advance estimates' of kharif production released on Tuesday, pegged output of foodgrains, oilseeds and cotton higher by 20, 64 and 41 per cent, respectively. All this is likely to boost agricultural growth for 2003-04 to well above 10 per cent, which, in turn, will push up the overall real GDP growth this year to 7-8 per cent.

Significantly, the expected rebound in the farm sector's fortunes comes even as both, industry as well as services, have registered higher growth rates in the first quarter. While the industrial sector has grown by 5.8 per cent during April-June 2003, against 4.7 per cent in the first quarter of 2002-03, the growth rate for services has correspondingly gone up from 6.9 per cent to 7.6 per cent. There is no reason to expect any real setback to the buoyancy in these sectors during the subsequent quarters of the current fiscal.

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