Revised data says growth nine-plus last year, FM hopes to stay the course

India’s growth story is much better than was portrayed earlier.

India’s growth story is much better than was portrayed earlier. Data put out today by the Central Statistical Organisation show that the economy not only clocked a rapid 9.6 per cent GDP growth during 2006-07 but also registered a 9.4 per cent in 2005-06 as against the earlier estimate of 9 per cent.

Based on the quick estimate figures of national income released today, the average GDP growth for the past four years (since 2003-04) has been 8.8 per cent.

This high growth trajectory, according to Finance Minister P Chidambaram, has been on account of an “investment boom” which also includes foreign direct investment (FDI).

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According to the quick estimates, the 9.6 per cent growth is on account of manufacturing as well as construction sectors, both showing a high 12 per cent growth in 2006-07. Added to this, the crucial agriculture and allied sectors also show a growth of 3.8 per cent. For the same period, electricity, mining and quarrying sectors registered 6 per cent and 5.7 per cent growth rates respectively.

As a reflection of a booming economy, the overall growth of a crucial services sector — financial sector, insurance, real estate and business services sector — stood at 13.9 per cent with banking and insurance alone registering close to 20 per cent growth. This is 5 percentage points more than what was registered the previous year.

On fears that the tight monetary policy adopted in 2007-08 could dampen this high growth trajectory, Chidambaram, while speaking to reporters, downplayed it, saying “my goal is to continue to maintain the same level of growth… in the (current fiscal year) growth will be close to 9 per cent.”

At the same time, he clarified that given the global situation “the government reserves the right to make rapid adjustments” and that the government was not making policies “in a vacuum”.