India Growth tops 8% after 15 years

http://timesofindia.indiatimes.com/articleshow/760166.cms

Growth tops 8% after 15 years

TIMES NEWS NETWORK[ THURSDAY, JULY 01, 2004 01:24:33 AM ]

New DELHI: Jaswant Singh may be forgiven a wry smile or two. His successor, P Chidambaram, gets to bask in the glory of handling the world’s second-fastest growing economy, which clocked a scorching 8.2% growth in the year ended March 31, 2004.

That was marginally better than the 8.1% forecast by CSO in February, more than double the meagre 4% growth posted in drought-hit 2002-03, and the best performance by the economy in the last 15 years.

Only China, with 9.8% growth, fared better in the last fiscal. In fact, India had actually crossed the 10% mark in the third quarter of 2003-04, notching up a whopping 10.4%. It lost a bit of momentum in the final stretch, but still finished with 8.2% growth for both the fourth quarter and overall fiscal year, according to CSO data released on Wednesday.

Growth was driven by the farm sector, which bloomed thanks to a fabulous monsoon. Agriculture grew by 9.1% in the year, after notching up 16.5% and 10.5% in Q3 and Q4 respectively. But don’t celebrate already — agriculture had posted negative growth of 5.2% in 2002-03, so the base was pretty low to begin with.

In comparison, manufacturing, which had posted a healthy 6.7% rise in 2002-03, grew by 7.3% in 2003-04. Other sectors with more than 5% growth included electricity, gas and water supply (5.5%); construction (6.2%); trade, hotels, transport, real estate and business services (6.8%); and community, social and personal services (6%).

The size of Asia’s third largest economy expanded to $600 billion (Rs 27,72,194 crore) from $550 billion (Rs 24,69,564 crore), while the per capita income for India’s 1.073 billion people rose to Rs 20,862, against Rs 18,912 per head for 1.055 billion people in 2002-03.

Chidambaram now has his task cut out. Can he ensure that the economy grows at the same pace on his beat? Agriculture is unlikely to repeat the spectacular growth witnessed in 2003-04.

Even so, analysts believe that India should be able to manage at least 7% in 2004-05, especially now that the Met office has confirmed that this year’s monsoon will be ‘normal’.