NEW DELHI: The Indian economy will grow at 7.2% in 2009-10, said the Central Statistical Organisation (CSO) on Monday in its advance estimate, compared to the finance ministry's and RBI's projections of 7.75% and 7.5% respectively. In 2008-09, the economy grew at 6.7%.
The manufacturing sector is estimated to grow at 8.9%, compared to 3.2% in the last financial year. This, many economists feel, may push the government to phase out stimulus package in the coming Budget.
"We should say stimulus has succeeded and we should begin to phase it out now," Planning Commission deputy chairman Montek Singh Ahluwalia said even as the domestic industry strongly pitched for continuation of the tax concessions.
CSO's estimate — which is a bit lower than the finance ministry's projection — has not dampen the mood in the government. Even the sensex, which fell in the initial trading, recovered later and closed 20 points up at 15,936 after the announcement of GDP growth figure.
To achieve 7.2% growth in 2009-10, the economy is expected to grow at 7.4% in the second half as against a growth rate of 7% in the first half. This suggests the economic activities are picking up. Officials in the finance ministry are hoping that their projection of 7.75% will come true. Finance secretary Ashok Chawala said the current estimate of CSO is likely to be revised upward when the figures for third and fourth quarters will be released. He argued that this had happened earlier also.
The main reason behind the economy is estimated to grow at a lower pace is the negative growth in the agriculture, forestry and fishing and slowdown in the services. According to CSO, these sectors, which constitute 14.6% of the economy, will grow at -0.2% as against 1.6% in 2008-09. Community, social and personal services, which had grown at 13.9% in 2008-09, is estimated to grow only at 8.2% in 2009-10. Similarly, financing, insurance, real estate and business services also slowed down a bit to 9.9% as against 10.1% in 2008-09.
However Ahluwalia said that economy is back on 7% plus growth rate and expected it to clock better growth rate of 8% next fiscal.
TOI
The manufacturing sector is estimated to grow at 8.9%, compared to 3.2% in the last financial year. This, many economists feel, may push the government to phase out stimulus package in the coming Budget.
"We should say stimulus has succeeded and we should begin to phase it out now," Planning Commission deputy chairman Montek Singh Ahluwalia said even as the domestic industry strongly pitched for continuation of the tax concessions.
CSO's estimate — which is a bit lower than the finance ministry's projection — has not dampen the mood in the government. Even the sensex, which fell in the initial trading, recovered later and closed 20 points up at 15,936 after the announcement of GDP growth figure.
To achieve 7.2% growth in 2009-10, the economy is expected to grow at 7.4% in the second half as against a growth rate of 7% in the first half. This suggests the economic activities are picking up. Officials in the finance ministry are hoping that their projection of 7.75% will come true. Finance secretary Ashok Chawala said the current estimate of CSO is likely to be revised upward when the figures for third and fourth quarters will be released. He argued that this had happened earlier also.
The main reason behind the economy is estimated to grow at a lower pace is the negative growth in the agriculture, forestry and fishing and slowdown in the services. According to CSO, these sectors, which constitute 14.6% of the economy, will grow at -0.2% as against 1.6% in 2008-09. Community, social and personal services, which had grown at 13.9% in 2008-09, is estimated to grow only at 8.2% in 2009-10. Similarly, financing, insurance, real estate and business services also slowed down a bit to 9.9% as against 10.1% in 2008-09.
However Ahluwalia said that economy is back on 7% plus growth rate and expected it to clock better growth rate of 8% next fiscal.
TOI
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