Growth Rate To Touch Double Digit

India''s growth rate for 2006-07 may be revised upwards from the current estimate of 9.4% to almost 10%. This is because growth has been more robust than estimated in both agriculture and manufacturing, according to highly-placed government sources. Since the base for comparison has become larger, one could argue that this year''s growth would be lower. But that is an arithmetic view of growth. The economic factors that drove growth to the touching distance of 10% last fiscal could sustain the momentum this year, too, to keep the growth rate above 9%, according to senior economists in the government.

The economy''s managers can take heart. If containing inflation at a yearly average of 5.4% was a creditable achievement when growth was estimated at 9.4%, the same task seems even more creditable when it turns out that growth was 10%. Looking forward, the central bank could consider relaxing its tight grip on monetary expansion a bit, considering that real expansion could be larger than what it has been bargaining for. The 2006-07 growth rate in the agricultural sector is turning out to be higher than 2.7%, as estimated by the Central Statistical Organisation earlier. The revised growth rate in the sector could be 4% or more.

Likewise, the manufacturing growth rate will be higher than the estimated 12.3%. The combined effect of these two factors could take GDP growth up in the range of 9.8-9.9%, sources said. The higher agriculture output will result mainly from an upward revision in the kharif output by about 4 million tonnes during the fiscal. The rabi output, too, has been estimated to be higher than anticipated. The GDP had expanded by 9% in 2005-06 and 7.5% in 2004-05. Per capita income has grown by 8.4% during the period under review as against 7.4% growth in the previous year, as per the CSO data.