Friday, February 8, 2008

GDP To Grow At 8.7 P.C

New Delhi: Slow expansion in industrial output due to high interest rates and sluggish agricultural growth are likely to impact India''s economic growth which is expected to grow moderately at 8.7 per cent in the current fiscal. The gross domestic product (GDP) had grown at 9.6 per cent in 2006-07, which was the highest in 18 years.

The GDP at factor cost at constant (1999-2000) prices in 2007-08 is likely to touch Rs. 31,14,452 crore as against Rs. 28,64,310 crore in 2006-07, according to the advance estimates of national income released by the Government on Thursday. The GDP grew at 9.1 per cent during the first half of this fiscal. It grew at 9.3 per cent in the first quarter and 8.9 per cent in the next three-month period. The advance estimates showed a further moderation during the rest of the year. The estimated growth rate is slightly higher than the conservative Reserve Bank of India (RBI) projection of 8.5 per cent but less than 9.1 per cent projected by the National Council of Applied Economic Research (NCAER).

It said the high interest rates had pushed up the cost of producing industrial goods and reduced demand for consumer goods, affecting growth in the manufacturing sector. The manufacturing sector is likely to grow at 9.4 per cent during the fiscal as against 12 per cent last year.

The advance estimates revealed that agriculture and allied activities would likely expand at 2.6 per cent as against 3.8 per cent in the previous year. In the industrial sector, the mining and quarrying sector is estimated to grow at 3.4 per cent as compared to 5.7 per cent in the previous financial year. Among the booming services sector, trade, hotels, transport and communication activities are likely to expand by 12.1 per cent from 11.8 per cent last year.

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