Mumbai: The first quarter of this fiscal witnessed a real GDP growth of 7.9% which is expected to accelerate further in the second half, said a CMIE report.
“Real GDP grew by 7.9% in the first quarter of 2008-09. We expect the economy to accelerate in the second half of the fiscal,” the Centre for Monitoring Indian Economy (CMIE) said in its September monthly review.
The broad composition of the growth in the first quarter was — agriculture: 3%, industry: 6.9% and services: 10%, CMIE said.
However, all the sectors recorded lower than the corresponding period a year ago with the slowdown severest in industry, it noted.
“Within industry, mining and construction sectors reported healthy acceleration in growth,” the report stated.
Mining growth accelerated from 1.7% in the previous year to 4.8% in this year while in the case of the construction industry, the acceleration was from 7.7% to 11.4%.
The manufacturing and utilities sectors saw a serious slowdown.
“Growth in manufacturing slowed to 5.6% in the first quarter of 2008-09 from the 10.9% growth registered in the first quarter of 2007-08,” CMIE said.
April-June 2008 was the second consecutive quarter with a less-than-six per cent growth in the manufacturing sector.
The services sector saw a small slowdown in growth in the first quarter due to fall in the financial sector, trade, hotels, transport and communication sectors.
Estimates for trade, hotels, transport and communications sectors have been revised a tad upwards to 10.7% from 10.6%.
“Individually, these make only a marginal difference to the GDP forecast. And on a net basis they leave our forecast unchanged at 9.4%,” CMIE said.
“However, the official GDP growth estimates are based on a seriously flawed Index of Industrial Production (IIP),” it noted.
“If the IIP problems are not fixed, the industrial growth in the GDP would turn out to be lower than our forecast. This lower bound of real GDP growth (with a flawed IIP) in 2008-09 is 9.2 per cent,” the reports mentions.