The Hindu Business Line : GDP grew 9% in 2005-06: CSO

Upward revision
Agriculture growth is now pegged at 6 per cent for 2005-06 against the earlier estimate of 3.9 per cent.
Finance Minister says upward revision of GDP growth rate augurs well for 2006-07 growth.
RBI also revises upwards 2006-07 growth forecast to 9 per cent.

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New Delhi Jan. 31 A sharp revision in agricultural sector growth has propelled the country's Gross Domestic Product growth rate in 2005-06 to 9 per cent against the previous estimates of 8.4 per cent.

The agriculture sector growth for 2005-06 has now been pegged at 6 per cent in the quick estimates for GDP growth in 2005-06 released by the Central Statistical Organisation (CSO) here on Wednesday. Agriculture growth for 2005-06 was earlier estimated at just 3.9 per cent.

Manufacturing growth for 2005-06 has now been marginally revised upwards at 9.1 per cent from 9 per cent.

Official data show that the 9 per cent GDP growth during 2005-06 was achieved due to high growth in agriculture, forestry and fishing, manufacturing, insurance, construction, financing, real estate and business services and transport.

`Augurs well for GDP growth'

Reacting to the revision in GDP growth rate for 2005-06 to 9 per cent, the Finance Minister, Mr Chidambaram, said that this augurs well for GDP growth for 2006-07.

India's GDP has grown by over 9 per cent in the first half of fiscal 2006-07.

Mr Chidambaram, however, sounded a note of caution, stating that the higher base of 9 per cent growth in 2005-06 might statistically impact the GDP growth of 2006-07.

"Since the base has been increased, we have to wait and see on how it reflects statistically on the growth of 2006-07," he said.

When pointed out that the Reserve Bank of India has also revised upwards its forecast on GDP growth for 2006-07 to 9 per cent, Mr Chidambaram said that he was grateful to RBI for its strong endorsement of high growth. "But, I think we should wait for CSO estimates. Now that the base has been increased for 2005-06, we have to see on what statistic impact it has on 2006-07," he added.

`Heart warming feature'

Mr Chidambaram highlighted that the "more heart warming" feature of the revised estimates for 2005-06 was the progress made on the savings and investment front.

"As against the earlier estimate of savings and investment in 2004-05 of 29.5 and 30.5, they now place it as 31.1 and 31.5. The 2005-06 savings and investments have been estimated at 33.4 and 33.8," he said.

The Finance Minister said that the policies of UPA Government have evidently promoted savings and investments. "Investment-GDP ratio at 33.8 yielding a growth of 9 per cent shows that there has been a gain in efficiency and productivity. The productivity gains are reflected in the numbers," he said.