Oct 1, 1999|
Indian economy comes out of the slowdown
According to the Central Statistical Organisation (CSO), the Indian economy has shown signs of recovery with the gross domestic products (GDP) having grown by 5.5% in the first quarter of FY2000.
While surge in GDP growth in the last quarter of FY99 was due to the strong growth in agricultural output, the manufacturing and services sectors have been largely responsible for the positive performance in 1QFY00. Other sectors that have contributed to the growth include construction and agriculture.
However, the mining & quarrying and electricity, gas & water supply sectors continue to be a source of concern. The lower growth posted in the electricity sector is of prime concern as a consistent slowdown can at one point restrict overall GDP growth.
With the Planning Commission already having stated that the power generation target for the ninth plan is likely to be missed by a wide margin, there seems little hope for growth in this sector. However, a sincere effort to promote private investment in the sector can definitely go a long way in alleviating the existing and expected power scenario.
Another moderating factor on the annual GDP growth will be the lower growth posted in agriculture. While a part of the slowdown will be due to the high growth posted in FY99, the monsoon factor is also likely to suppress growth this year.
FY00 has started on a positive note. However, whether the economy will continue to grow at these rates is likely to depend on the performance of the agriculture sector and the sustenance of existing growth rates in the manufacturing and services sectors.
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