The Hindu Business Line : Manufacturing pushes GDP growth to record 8.9 pc in Q1

Buoyed by strong manufacturing sector growth, the country's gross domestic product (GDP) grew 8.9 per cent in the first quarter of the current fiscal, compared will 8.5 per cent recorded in the same period last year.

This is the highest first quarter growth recorded since 2000-01, the Union Finance Minister, Mr P. Chidambaram, said here on Friday. The next best first quarter growth performance was the 8.5 per cent rate of last year (2005-06).

`Maintain growth'

Expressing satisfaction at the performance, the Finance Minister said that it should be possible to maintain a GDP growth of 7.5 per cent or above for every quarter if prudent economic policies were followed.

"In fact, my expectation is we can continue to maintain a growth rate close to 8 per cent every quarter provided we continue to follow prudent policies", Mr Chidambaram told prespersons after the Central Statistical Organisation (CSO) released the first quarter GDP numbers here today.

He highlighted that, except for the second quarter of 2004-05, the country's GDP had grown by at least 7 per cent in every quarter since the United Progressive Alliance Government assumed office in 2004-05. As per the CSO's estimates, quarterly GDP at factor cost at constant (1999-2000) prices for Q1 of 2006-07 stood at Rs 6,56,064 crore.

This represents a 8.9 per cent growth over the GDP of Rs 6,02,476 crore recorded in Q1 of 2005-06.

The manufacturing sector continued to post buoyant growth, reporting a 11.3 per cent upsurge in Q1 2006-07 as against 10.7 per cent and 6.6 per cent in the first quarter of 2005-06 and 2004-05, respectively.

While agriculture grew by 3.4 per cent (the same as in the previous year), the services sector grew by 10.6 per cent (10.1 per cent).

The only two sectors that recorded drop in growth rates were `construction' and `electricity, gas and water supply'. While the GDP of construction sector grew 9.5 per cent (12.4 per cent ), the electricity sector grew by 5.4 per cent (7.4 per cent).

Drivers

Mr Chidambaram said that some of the drivers of growth in the first quarter of the current fiscal were commercial vehicle production (up 36.2 per cent), passengers handled by civil aviation (up 32.2 per cent) and stock of telephone connections including mobiles (48.9 per cent). The year-on-year bank credit growth stood at 31 per cent.

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