Govt pegs GDP growth at 6.9%

Lower agricultural performance in the current financial year is likely to pull the economic growth down to 6.9 per cent from 8.5 per cent in the last financial year.

According to Advance Estimates of National Income released by the government, growth in the agricultural sector is expected to be 1.1 per cent in the current fiscal over 9.6 per cent last year.

Even the robust manufacturing sector performance at 8.9 per cent in 2004-05 compared to 6.9 per cent in 2003-04 could not check the fall in overall economic growth, the advance estimates said.

Last month the government had revised the GDP growth for last financial year to 8.5 per cent while releasing the Quick Estimates of National Income.

Electricity, gas and water supply sector is likely to post higher growth rate at 6.3 per cent this fiscal compared to 3.7 per cent in the previous fiscal.

The growth rate of community, social and personal services is also expected to be higher at 6 per cent as against 5.8 per cent in 2003-04.

Other sectors are estimated to register lower growth rates in 2004-05 with mining at 5.3 per cent, construction at 5.7 per cent and services at 11.3 per cent as compared to 6.4, 7 and 11.8 per cent respectively in 2003-04.

The slowdown in construction sector is primarily due to the fall in steel production at 3.8 per cent in April-December 2004-05 as against 11.8 per cent in the year ago period, even though cement sector posted a higher growth at 6.8 per cent during the first nine months compared to 5.6 per cent in the corresponding period previous fiscal.

The financing, insurance, real estate and business services sector is likely to maintain a similar growth of 7.1 per cent, the estimates said.

In rupee terms, the GDP in 2004-05 is likely to attain a level of Rs 15,29,366 crore (Rs 15293.66 billion) as against the quick estimates of Rs 14,30,548 crore (Rs 14305.48 billion) for 2003-04.

The per capital income in real terms during 2004-05 is likely to be Rs 12,414 compared to the quick estimates of Rs 11,799 for 2003-04.

The growth rate in per capital income is estimated at 5.2 per cent in the current financial year as against the previous year's estimate of 7.1 per cent.