Booming economy poised to grow at 8.1 percent

    New Delhi: Surpassing all expectations, the Indian economy is expected to grow at the rate of 8.1 percent in fiscal 2005-06 as per data released by the Central Statistical Organisation (CSO) here today. The Advance Economic Estimates 2005-06 attributes the improved GDP growth to the growth rates of over five per cent in the sectors of manufacturing, electricity, gas and water supply, construction, trade, hotels, transport and communication, financing, insurance, real estate business services, and community, social and personal business. Manufacturing which forms the 14.7 percent of the GDP, is being considered as the main driving force behind the forecasted growth. The GDP estimated growth of 8.1 percent is 0.6 percent above the growth rate of 7.5 per cent during the fiscal year of 2004-05. However, the service sectors too have been estimated to show a robust performance with its 9.8 percent growth rate.

    This has been achieved taking in account the change in the base year which is now been estimated at constant (1999-2000) prices than the earlier base year of 1993-94. The agriculture sector too has shown an impressive performance along with forestry and fishing it is poised to grow at the rate of 2.3 per cent ,as against the previous years growth rate of 0.7 per cent. The per capita income at current prices during 2005-06 is estimated to be Rupees 25,788 (USD 583) as compared to Rupees 23,222 (USD 525) during 2004-05, showing a rise of 11.0 per cent. The estimate has already breached the estimated range of the RBI which had projected a 7.5-8.0 per cent growth for fiscal 200506 in January. But, the market is buzzing with anticipation for another round of increase in the interest rates. Last month the RBI in its monetary policy had brought about a hike of 25 basis points in the Repo rate increasing it to 5.5 percent.

   Meanwhile,the BSE sensitive index too maintained its 10,000 mark of yesterday by closing at 10,066, with a gain of 86 points. Enthused by higher growth projection, Finance Minister P Chidambaram today said that the Sensex crossing 10,000 points mark and the growth projection of 8.1 per cent was a "heady mixture". "Sensex reflects the business confidence and strong fundamentals of the economy and the sound monetary and fiscal policy will bring us growth," he added. Although, India is among the fastest growing economies in the world, it still lags behind China which grew at 9.9 percent in 2005.

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