Financial Daily from THE HINDU group of publications
Thursday, Jul 01, 2004
Industry & Economy - Economy
GDP surges 8.2 pc on all-round growth
New Delhi , June 30
IF there is one thing the ruling United Progressive Alliance (UPA) Government cannot complain about unlike most previous regimes, it is with regard to having inherited an economy on a low growth trajectory.
According to the `revised estimates' of national income for 2003-04, released by the Central Statistical Organisation (CSO) here today, the country's Gross Domestic Product (GDP) grew by 8.2 per cent in real terms, compared to 4 per cent during 2002-03.
Only on three occasions earlier has the GDP growth surpassed the 8 per cent mark - 8.1 per cent in 1967-68, 9 per cent in 1975-76 and 10.5 per cent in 1988-89. And on each of these occasions, the key driver was the farm sector recovering from drought-induced declines.
In 1967-68, agriculture grew by 14.9 per cent, having contracted by 1.4 per cent and 11 per cent during the preceding two years. In 1975-76, the 12.9 per cent agricultural growth followed a 1.5 per cent decline in the previous year, just as the 15.5 per cent growth in 1988-89 came after the - 1.3 per cent and - 0.6 per cent figures for the preceding two years.
True, there has been a strong rebound in agriculture, which has grown by 9.1 per cent after suffering a decline of 5.2 per cent in 2002-03. But not all of the 8.2 per cent overall GDP growth recorded for 2003-04 can be attributed to the recovery-from-drought factor. The revised estimates show that the industry and services sectors have also performed better, registering growth rates of 6.7 per cent and 8.7 per cent during 2003-04, against their corresponding previous fiscal levels of 6.4 per cent and 7.1 per cent, respectively.
Another way to make the same point is by working out what the overall real GDP growth for 2003-04 had been, assuming the farm sector had not grown at all. The figure in this case, too, comes to a respectable 6.2 per cent. Simply put, there is a genuine underlying growth momentum in the economy, which the Finance Minister, Mr P. Chidambaram, can perhaps consolidate further through what many hope to be yet another `dream budget'.
The CSO has estimated the GDP of the country - the sum total of all incomes generated from within its domestic territory, valued at market prices - at Rs 27,72,194 crore during 2003-04, which is about $603 billion at current exchange rates.
The GDP at factor cost - which nets out all indirect taxes and explicit subsidies and, therefore, represents actual incomes `earned' - was estimated at Rs 25,23,872 crore.
The Net Domestic Product (NDP) - GDP at factor cost minus depreciation of assets - amounted to Rs 22,64,427 crore.
The country's `national income' or Net National Product (NDP) - NDP at factor cost plus net factor income from abroad - stood at Rs 22,38,495 crore during 2003-04. This figure, for an estimated population of 107.3 crore, translated into an annual per capita income (technically called per capita NNP at factor cost) of Rs 20,862. That's what an average person in India would have earned last fiscal.
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