New Delhi: India’s economy grew at a faster clip in fiscal 2007-08 than was thought earlier.
Based on an updated base year for calculating national accounts—2004-05—the country’s gross domestic product (GDP) grew at 9.2% against 9% estimated earlier. Its GDP for 2008-09 remained at 6.7%.
The Central Statistical Organisation (CSO) released the updated figures on Friday. The base year is changed periodically to account for structural changes in the economy and depict a true picture through macro aggregates such as GDP, consumption expenditure and capital formation. The previous base year was 1999-2000.
CSO said the change in the 2007-08 GDP rate was mainly because of higher growth seen in the registered manufacturing sector after the results of the annual survey of industries became available. The earlier estimate was based on the index of industrial production.
Graphics: Ahmed Raza Khan / Mint
For 2008-09, the industry sector’s contribution to GDP increased 28% from the earlier estimate of 25.76% based on the new base year. As a result, the contribution of the agriculture sector to GDP declined to 15.7% from 16.95% earlier, and that of the services sector to 56.35% from 57.28%.
“There has been a resurgence in the industrial sector since 2004-05, especially in the manufacturing component. This means growth is now getting diversified, which is a good thing for economy,” said Mahesh Vyas, managing director and chief executive of private macro tracker, Centre for Monitoring Indian Economy.
CSO will release advance estimates of GDP for 2009-10 on 8 February.
During the first half of the current fiscal 2009-10, India’s economy grew at 6.5%. Based on the professional forecasters’ survey, the Reserve Bank of India on Thursday revised the growth outlook for 2009-10 to 6.9% from 6% earlier.
India’s outgoing chief statistician, Pronab Sen, recently told Mint in an interview the slump in kharif, or summer crop, output due to a drought situation in the country would be reflected in the third quarter of the fiscal, which may bring down GDP growth significantly. As per the first estimates, production of kharif foodgrains and oilseeds is expected to decline by around 16% over the previous year.
Per capita income, according to the quick estimates for 2008-09, has increased from Rs37,490 to Rs40,141. GDP was estimated at Rs5,228,650 crore for 2008-09 at current prices as per the new series, against Rs4,933,183 crore earlier.
The gross domestic saving rate as a percentage of GDP at current prices declined to 32.5% in 2008-09 from 36.4% in the previous year. This was mainly due to a fall in the rates of savings in the public and private corporate sector, even as the contribution of household savings to GDP remained at its previous level. The rate of gross capital formation, signifying investment rate in the economy at current prices, fell to 34.9% in 2008-09 from 37.7% in 2007-08.