7% Growth Target To Be Missed: Subbarao- March 12, 2009

It is expected that India will miss its 7 per cent growth estimate for the current fiscal year as a result of the global economic crisis, according to RBI governor Duvvuri Subbarao.

Subbarao said in an interview of Japan''s Nikkei newspaper that the next fiscal period of "2009-10 will be a more challenging year.” He also added, emerging economies should have a stronger voice in multilateral organizations such as the International Monetary Fund and the World Bank to "reflect the new realities of the global economy."

Indian economy expanded by 5.3 per cent, slowest speed in around 6 years, during December quarter as compared to corresponding period a year ago. However it had been growing with 9 per cent or higher pace in the past three fiscals.

Capital Goods Production Growth Rate Falls

New Delhi: Government released data on March 12 on industrial growth. Up to now, it was the consumer goods segment which was the slacker as far as growth in 2007-08 was concerned, but the latest data on Index of Industrial Production (IIP) have shown a sharp fall in the growth rate of the capital goods sector, which basically means that fresh investments are not keeping pace with the expected growth projections. The capital goods sector growth fell to just 2.1 per cent.

The IIP data for January 2008 indicated that the overall index grew by 5.3 per cent against a 11.6 per cent growth in January 2007, brought down by the decline in all the major segments like mining (1.8 per cent growth against 7.7 per cent), manufacturing (5.9 per cent against 12.3 per cent) and electricity generation (3.3 per cent against 8.3 per cent). Cumulative April-January 2007-08 data are slightly better, with the mining sector growth at 4.6 per cent (against 4.8 per cent), manufacturing at 9.2 per cent (12.1 per cent) and electricity generation growing at 6.3 per cent (7.6 per cent). Overall IIP for April-January 2007-08 was 8.7 per cent against 11.2 per cent in the comparable period of the preceding year.

Kerala Sees 8.1% Growth In GSDP

Thiruvananthapuram: The Gross State Domestic Product (GSDP) of Kerala increased to 8.1 per cent in 2006-07, which was marginally higher than the eight per cent registered in the previous year. A significant event was the setting up of Debt Relief Commission by the State Government, which brought significant hopes to the distressed peasantry. Debt relief, together with the provision of an assured remunerative price of Rs 9 per kg for paddy and the implementation of the National Rural Employment Guarantee Scheme in the poorest districts of the State, brought some relief in rural distress.

At current prices, the GSDP is pegged at Rs 1,32,738.53 crore as against Rs 1,18,998.19 crore in the previous year. The growth rate in current prices is 11.6 per cent 2006-07 as compared to 11.2 per cent in the previous year.The per capita state income at constant prices increased from Rs 25,657 in 2005-06 to Rs 27,284 in 2006-07, reporting a growth of 6.3 per cent. At current prices, it was Rs 33,609 in 2006-07 as against Rs 30,668 in the previous year, with the growth rate being 9.6 per cent.

Budget To Stimulate Investment, Growth: Chidambaram

New Delhi: Finance Minister P Chidambaram on Feb 29 said the Union Budget for 2008-09 would stimulate investment and consequently growth, while pointing out that he had done the best through the budgetary exercise by providing credit facilities to the farm sector. Credit is only one element of the story in the farm sector. I provided more credit. Budget can only address credit side and the farm sector has not done too bad this year, he said in his post-Budget comments. The Finance Minister had announced debt waiver and relief worth Rs 60,000 crore to small and marginal farmers in the Budget, the last full financial statement before the general elections in 2009. This Budget will stimulate investment and growth and that growth will create wealth. The economy is growing by eight per cent, people have become more tax compliant and they are willing to pay taxes, he said on the buoyancy in government''s revenues.

GDP Growth Slows To 8.4 Per Cent In Q3 Of FY''08

New Delhi: Confirming fears of a slow down expressed in the Economic Survey, India''s GDP expanded by a tardy 8.4 per cent in the third quarter of 2007-08 primarily due to sluggishness in manufacturing and construction sectors. According to quarterly estimates of Gross Domestic Product (GDP) released by the government on Feb 29, October-December quarter was the worst in 2007-08 in terms of economic growth (8.4 per cent), which in turn can pull down full year growth to 8.7 per cent as feared by the Economic Survey.

While the growth rate of the manufacturing sector came down to 9.3 per cent during October-December 2007 from 11.3 per cent in the corresponding period previous year, the construction sector growth rate dipped to 8.4 per cent from 10.8 per cent during the same period. The Economic Survey, tabled by Finance Minister P Chidambaram in Parliament on Thursday, had said growth would fall to 8.7 per cent as the economy faced the challenges of poor performance by infrastructure and industrial sectors

The GDP growth rate during nine-month period (April-December 2007) worked out to be 8.9 per cent down from 9.6 per cent during the corresponding period last year. The agriculture and allied sector growth rate during Q3 declined to 3.2 per cent from 3.4 per cent in the corresponding quarter in the last fiscal. The GDP growth rate was 9.3 per cent in the first quarter of this fiscal before it dipped to 8.9 per cent in Q2. The third quarter of 2007-08 is also the worst quarter in terms of growth since April 2006.

Chidambaram Hopeful Of 9 P.C. Growth

New Delhi: With the country''s economic fundamentals strong and investment climate full of optimism, Finance Minister P. Chidambaram on Thursday exuded confidence on achieving an average GDP growth of nine per cent during the Eleventh Plan period (2007-08 to 2011-12) while reining in inflation alongside.

As for the outlook for 2008-09, Mr. Chidambaram said: Optimism, but with caution, is the watchword while commenting on the policy prescriptions of the Economic Survey 2007-08 which projected a lower GDP growth of 8.7 per cent for the current fiscal and, in that light, viewed sustenance of a high growth as a daunting task.

Speaking to newspersons immediately after tabling the Survey in Parliament, Mr. Chidambaram pointed out that the country was required to respond to the evolving global economic situation so as to ensure that its growth was not affected and this, he said, could be achieved by capitalising on the opportunity arising from the favourable conditions.

I am optimistic about growth and containment of inflation in the coming year [2008-09], he said, while noting that his priority was to provide a conducive investment climate and manage the macro economy to facilitate non-inflationary growth.

Reading out from a prepared statement which was later released to the press, Mr. Chidambaram said: Keeping inflation under control in an uncertain global environment will be one of the major challenges in 2008-09. He noted that the current slowdown and possible recession in the global economy posed risks to growth.

Sustaining 9 P.C. Growth Will Be Tough: Survey

New Delhi: Holding out a warning that the current slowdown in the U.S. would have an effect on the Indian economy, the Economic Survey 2007-08 maintained that sustaining a high GDP growth of nine per cent while reining in inflation would be a tough challenge.

Tabled in Parliament by Finance Minister P. Chidambaram on Feb 27, the Government''s pre-Budget annual economic progress report said that in the current uncertain scenario, an increase in the overall growth to double digits would entail additional reforms and came out with a policy prescription. Among the various measures suggested to sustain the high growth momentum, the Survey favoured partial sale of the identified profit-making non-navaratna public sector undertakings (PSUs), phasing out control on sugar, fertilizer and drugs, sale of old oilfields to the private sector, a higher share for foreign equity in retail trade and further opening up of the banking and insurance sectors to foreign direct investment (FDI).

With the economy projected to grow at 8.7 per cent during the current fiscal, the Survey pointed out that the lower growth represented a deceleration from the unexpectedly high growth of 9.4 and 9.6 per cent in the preceding two years. Maintaining growth rate at nine per cent will be a challenge and raising it to two digits will be an even greater one, the Survey said.

Linking the huge accumulation of foreign capital inflows as the reason for the pressure building up on prices, the Survey said that inflationary impulses from global commodity prices must be tackled through use of fiscal and trade policy instruments. Inflation this fiscal is projected to return to the earlier level of 4.4 per cent, down from 5.4 per cent in 2006-07.

PM Expresses Confidence On Achieving 9% Growth

Prime Minister Manmohan Singh on Feb 15 expressed optimism on achieving 9 per cent growth rate. However, he admitted the country cannot be completely insulated from chilly global winds that may blow in its direction. Speaking at Ficci''s golden jubilee auditorium where a picture of Mahatma Gandhi smiled down on the gathering from the backdrop, Dr Singh echoed his theme that industrialists served as trustees of society. He took pains to describe what his government has done over four years and, for the next five years through the 11th Five-Year Plan, proposed to build physical and social infrastructure that industry needs to sustain growth. The prime minister also explained why battling inflation was top priority of his government. An important policy stance we have adopted to ensure that growth is more inclusive has been to keep inflation under check... Some of you are not happy about our emphasis on inflation control. I see things differently. Inflation is an iniquitous tax. It hurts the poor more than the rich. Dr Singh said the government''s initiatives in agriculture and rural development, infrastructure, education and healthcare, along with efforts to keep inflation under check, would step up economic growth and make it more inclusive. In all, prime minister''s speech appeared as an attempt at showcasing the UPA government as the rightful custodian of impressive and inclusive economic growth. PM gave his government credit for higher growth and putting in place the basic architecture necessary for ensuring the growth is broad-based.

Gujarat To Adopt Focused Area Approach To Spur Growth

Gujarat, with more than 50 special economic zones (SEZs) in its kitty, is now working out a special focused area approach to spur growth in sectors ranging from salt and salt-based industries to infrastructure development. According to official sources, special emphasis is being laid for boosting infrastructure development. The government has planned special incentive schemes aimed at attracting global investments into this sector. They will be known as premier or prestigious schemes. In the past years, the state has introduced such schemes but the main focus of them was industrial projects. The pioneer industries scheme, one of such leading schemes, has attracted investment of Rs 1 billion or more. Now a similar experiment is being planned for the infrastructure sector.

One of the major infrastructure development projects is the creation of state-of-the-art industrial and logistics parks. So far, the Gujarat Industrial Development Corp (GIDC) was responsible for creating the requisite infrastructure facilities in the state. Now the state government could opt for private-public partnership for implementing infrastructure projects that would also provide logistics services to meet the needs of SEZs, ports and special investment region.

Growth Of Infrastructure Sector Falls To 4-Pc In December

New Delhi: The growth of the six key infrastructure sectors in December 2007 slipped to 4 per cent compared to nine per cent achieved a year ago. The April-December performance of infrastructure industries - crude oil, petroleum refinery products, coal, electricity, cement and steel - also fell to 5.7 per cent as against 8.9 per cent in the same period last year. Crude oil was the worst performer with a negative growth of 1.5 per cent in December as against a positive growth of 10.7 per cent in December 2006.

Petroleum refinery products registered a growth of just two per cent in December 2007 as compared with 10.8 per cent in the same period in 2006. Finished steel grew by 5.13 per cent as against 10.2 per cent, while expansion in the cement sector dropped to 3.9 per cent from eight per cent. Electricity generation on the other hand went up by only 3.8 per cent as compared to 9.1 per cent. Coal production, on the other hand, registered a growth of 8.4 per cent as against a growth rate of 2.9 per cent in December 2006.

Industrial Output Witnesses 7.6 Pc Growth In Dec

New Delhi: The official Index of Industrial Production (IIP) has witnessed a 7.6 per cent year-on-year growth during December, marking a second successive month of sub-par growth following the 5.1 per cent of November. However, there is an element of statistical illusion in the 7.6 per cent figure in the latest recorded month. For, it comes on a high base growth rate of 13.4 per cent during December 2006, just as the 5.1 per cent IIP increase for November 2007 was over and above the 15.8 per cent in November 2006.

Moreover, among the IIP''s main sectoral components, the manufacturing index has risen by a reasonably healthy 8.4 per cent year-on-year in December (though below the 14.5 per cent for the same month of the previous year). For the first nine months of the current fiscal, industry as a whole has grown by nine per cent (compared to 11.2 per cent in April-December 2006), with these standing at 9.6 per cent (12.2 per cent) for manufacturing, 4.9 per cent (4.4 per cent) for mining and 6.6 per cent (7.5 per cent) for electricity. The IIP data, moreover shows a 16.6 per cent rise in production of capital goods in December and 20.2 per cent during April-December 2007. This comes on the corresponding previous year''s growth rates of 26.2 per cent and 18.6 per cent.

The high growth in this sub-sector is indicative of buoyant investment activity. This, in turn, seems to be replacing the earlier consumption- and export-driven growth phase. Proof of this is in consumer durables, which has recorded growth rates of 2.2 per cent in December 2007 (1.8 per cent in December 2006) and 1.3 per cent in April-December 2007 (11.2 per cent in April-December 2006).

CII Reports Marginal Decline In Sectors Showing Negative Growth

New Delhi: Out of a total of 100 sectors reporting production, 15 sectors registered a growth rate of over 20 per cent and 30 sectors recorded a growth rate of 10-20 per cent, reported the Confederation of Indian Industry (CII) Ascon survey for April-December 2007 compared to April-December 2006. The survey, which tracks the performance of various manufacturing sectors of industry, revealed that although the sectors showing excellent growth had declined compared to the last quarter, the number of sectors showing high growth have moderately increased for the same period. The percentage continued the same for the moderate category and percentage of sectors in negative category showed slight decline for April-December 2007. It is heartening to see the slight fall in the sectors showing negative growth and modest increase high growth sectors, but we still need to be cautious and work with the Government to speed up the growth rate of manufacturing.

The excellent growth category included electricals such as circuit breakers, power transformers, transmission line towers and power cables along with rubbers hoses. Soya oil, asbestos cement, industrial valves, abrasives with electrical fans were all in the high growth category. According to the survey, cement, motor stamping, energy metre, capacitors, auto components, ball and roller bearing, polymer, edible oil and textile machinery have shown moderate growth while fertiliser, switchgears, and motor cycles were in the negative growth category.

Indian Economy To Grow At 8.75% This Fiscal: IMF

The International Monetary Fund has projected the Indian economy to grow at a rate 8.75 per cent this fiscal on the back of rising productivity and investment. Though the country''s favourable outlook attracts huge capital flows which help finance investment, it also poses a challenge to find a balance between exchange rate stability and financial openness, IMF Executive Directors said in their summary note. The IMF estimate comes in the wake of India revising upwards its growth estimates for the last fiscal to 9.6 per cent from earlier calculation of 9.4 per cent a few days ago and Finance Minister P Chidambaram exuding the confidence that the economy will grow close to nine per cent for the current fiscal. On the other hand, the Reserve Bank of India in its quarterly review of monetary policy has retained its estimate of at 8.5 per cent this fiscal, true to the conservative style of most central banks. The apex bank also maintained a status quo policy rates against market expectation of a reduction in key rates.

Manufacturing Sector Growth Declines To 9.8% In Apr-Nov ''07

Mumbai: Manufacturing sector growth declines to 9.8 per cent during April-November 2007 as against 11.8 per cent during the year-ago period, the Reserve Bank said. The moderation in the sector''s growth was due to decelerated/negative growth of 11 out of the 17 manufacturing industry groups accounting for 49.3 per cent weight in the index of industrial production (IIP), it said in its Macroeconomic and Monetary Developments Review.

These included machinery and equipment, basic metal and alloy industries, rubber, plastic, petroleum and coal products, cotton textiles, non-metallic mineral products and transport equipment and parts, among others. Metal products and parts'' group recorded a decline due to the performance of tin metal containers, welded link chains and razor blades. The leather and leather and fur products'' group, however, made a turnaround to register positive growth during the period. On the IIP, the apex bank said IIP growth moderated to 9.2 per cent during April-November 2007 from 10.9 per cent during the year-ago period. Capital and intermediate goods sectors recorded a double-digit growth during April-November 2007 while growth in the consumer durables segment declined to 5.2 per cent from 9.9 per cent in the same period.

Industrial Growth Plunges To 5.3%

Growth in India''s industrial production plunged to 5.3 per cent in November this fiscal from 15.8 per cent last year following a huge decline in the manufacturing sector. The manufacturing growth dipped to 5.4 per cent in November from 17.2 per cent in 2006. Electricity segment also showed a dismal performance growing by only 5.8 per cent, against 8.7 per cent. Mining was down from 8.8 per cent to 3.5 per cent. For the April-November period of fiscal 2007-08, the Index of Industrial Production settled at a single digit figure of 9.2 per cent against 10.9 per cent in the same period last year.All the segment indices were in the single digit for the April-November period.