THE HINDU

Online edition of India's National Newspaper
Saturday, May 30, 2009

India manages to clock 6.7 % growth in 2008-09
Special Correspondent

NEW DELHI: Unmindful of the global recession and economic slowdown the world over and proving a number of international agencies wrong, the Indian economy managed to clock a 6.7-per cent growth in 2008-09 despite the dismal performance of the manufacturing sector.

According to official figures released here on Friday, a 5.8-per cent growth in the last quarter of the fiscal, at a time when most developed economies have gone into the negative zone, has put India among the top-most growing nations in the world.

The stock market whole heartedly welcomed the news with the Sensex rising by 400 points to touch 14692.27 by mid-day, a level witnessed last in September 2008.

Outgoing Planning Commission Deputy Chairman Montek Singh Ahluwalia said the growth was on expected lines.

The growth in 2008-09 is lower than the nine per cent recorded in the preceding fiscal, but that is not as low as expected by certain analysts and quite in the range projected by the Reserve Bank of India at 6.5-7 per cent.

However, the manufacturing sector proved to be a dampener where the growth turned lower at 1.4 per cent in the fourth quarter, pulling down the fourth quarter GDP growth to 5.8 per cent from 8.6 per cent a year ago. GDP growth in the third quarter of 2008-09 has been revised to 5.8 per cent from 5.3 per cent estimated provisionally.

However, compared to the previous fiscal, economic growth did exhibit a slowdown, triggered by sluggish manufacturing due to slackening demand. In fact, a sharp decline in demand overseas has led to shrinking exports since October.

For the entire fiscal, manufacturing grew by just 2.4 per cent against 8.2 per cent in 2007-08.

Agriculture posted 1.6 per cent growth in 2008-09 against 4.9 per cent in 2007-08, even as it bettered performance in the fourth quarter of the last fiscal to 2.7 per cent against 2.2 per cent in the same period in the previous fiscal.

Only mining and quarrying, and community, social and personal services showed improved performance in 2008-09 over the previous fiscal. The Central Statistical Organisation had pegged GDP growth at 7.1 per cent for 2008-09 in its advance estimates.