The Hindu Business Line : GDP soars 10.4 pc in 3rd quarter — Farm sector expands 16.9 pc; industry, services too post robust growth

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GDP soars 10.4 pc in 3rd quarter — Farm sector expands 16.9 pc; industry, services too post robust growth

Our Bureau

New Delhi , March 31

THE economy is seemingly on a roll, with the country's gross domestic product (GDP) registering a 10.4 per cent year-on-year growth during the third quarter of 2003-04. This is over and above the growth rates of 5.7 per cent and 8.4 per cent for the first and second quarters, respectively.

The cumulative average growth for April-December 2003, thus, works out to 8.2 per cent, compared with 4.1 per cent for the corresponding three quarters of the previous year. The 8.2 per cent cumulative growth for April-December 2003 is also marginally higher than the 8.1 per cent `advance estimate' for the 2003-04 fiscal as a whole, made by the Central Statistical Organisation (CSO) on February 9.

The 10.4 per cent GDP growth for the third quarter has, to a large extent, been propelled by the farm sector, which has expanded by 16.9 per cent, having contracted 9.8 per cent during the same quarter of the preceding fiscal.

The agricultural rebound, in turn, has been made possible by good monsoon rains, which has resulted in production of kharif rice, coarse cereals, pulses and oilseeds surging by 22.3 per cent, 38.3 per cent, 32 per cent and 84.4 per cent, respectively during the kharif season of 2003-04.

Output of cotton, too, is expected to be higher by 42.1 per cent. Given that the Agriculture Ministry has projected a bumper crop during the rabi season as well, the fourth quarter is also likely to return a double-digit growth rate for the farm sector. All put togetherthe overall GDP growth for 2003-04 could well turn out to be more than the 8.1 per cent advance estimate.

At the same time, it is heartening to note that the 10.4 per cent growth during the third quarter has not been entirely about an agricultural rebound. Industry has also performed well, recording a growth of 6.5 per cent, over and above 6.8 per cent for the third quarter of 2002-03. Within industry, the manufacturing sub-sector has registered a higher growth of 7.4 per cent (against 6.9 per cent during October-December 2003). It is mainly the mining and construction segments that have staged a slowdown.

The story is even better with regard to the services sector, which has grown by 7.6 per cent, 9.8 per cent and nine per cent, respectively during the first three quarters of 2003-04, as against their corresponding levels of 7.2 per cent, 7.8 per cent and 6.8 per cent, respectively.

The economic recovery underway now appears, therefore, to be reasonably broad-based and not just a phenomenon confined to the farm sector.