On Monday the Central Statistics Office revised its GDP growth projection to 8.6% for the year ending 31 March 2011. Numbers revised earlier this month show India’s economy expanded 8% in 2009-10.
Monday’s estimate was boosted by increased farm output. A robust monsoon and strong harvest this year has seen the sector flourish. The government’s estimate for farm output this year stands at 5.4% compared to the previous year’s 0.4%. Manufacturing, meanwhile, will retain a steady 8.1%. And the estimate says services will hold its ground at 9.6%. Finance minister Pranab Mukherjee described Monday’s numbers as encouraging. He said the next challenge would be to tackle inflation and trade imbalances.
And while the 8.6% estimate seems promising, there could be one hitch. The new numbers are extrapolated from data available only till about December. But industrial production is expected to fall in three remaining months of the fiscal, which could mean a downward revision of the estimate later in the year.
And in other news, the US has promised to make more dual-use technologies available to Indian firms. On Monday, the American commerce secretary Gary Locke said his country would further loosen its export control regime towards India in the coming months. His statement came soon after the US took nine Indian organizations off the so-called Entities List. Being on that list made it impossible for those outfits to do business with US firms.
Meanwhile, Locke also called on India to open up its markets. He said the US was concerned about both tariff and non-tariff barriers. Indian commerce minister Anand Sharma responded by saying India would open its markets at what he called an incremental pace. Sharma also said India would soon unveil a national manufacturing policy that would encourage investments in large new industrial zones.
And finally, Indian stocks ended Monday flat despite the good news on the economy. The Sensex climbed 29 points to 18,037. And the Nifty was virtually unchanged, rising 0.25 to 5,396.
Some major stocks did better, making up for some of their losses on Friday. ITC climbed 2.62% on the BSE to 156.90. And RIL gained 1.07% to 929.30.