As a result of change in the method of calculations, Indian economy will grow by 7.4 per cent this fiscal outpacing China to become the world’s fastest growing economy. Aided by a 7.5 per cent expansion during October- December, Asia’s third-largest economy will this fiscal see the fastest pace of growth since 2010-11 when it achieved 8.7 per cent, even as some doubts lingered on the revised methodology.
The growth in gross domestic product (GDP) in 2010-11 was calculated based on factor cost which has now been changed to constant prices to take into account gross value addition in goods and services as well as indirect taxes. Besides, the base year has been shifted to 2011-12 from 2004-05 earlier. last month, the Statistics Ministry had pegged the previous year’s growth at 6.9 per cent as against 4.7 per cent estimated previously, a revision which led to some economists including RBI Governor Raghuram Rajan seeking more clarity.
The sectors which registered a growth rate of over 7 per cent are financial, real estate and professional service, trade, hotels, transport, communication and services related to broadcasting; public administration, defence and other services; and electricity, gas, water supply and other utility services. Growth in the agriculture, forestry and fishing; mining and quarrying; construction and manufacturing’ is estimated to be 1.1 per cent, 2.3 per cent, 4.5 per cent and 6.8 per cent, respectively.
The data released by the Central Statistics Office (CSO) is as per the advance estimates for GDP based on the new calculation methodology. It further said that the economy grew by 7.5 per cent in the September-December quarter of the current fiscal after a growth rate of 8.2 per cent in the preceding quarter. “Real GDP or GDP at constant (2011-12) prices in the year 2014-15 is likely to attain a level of Rs106.57 lakh crore, as against the First Revised Estimate of GDP for the year 2013-14 of Rs99.21 lakh crore, released on 30th January 2015. The growth rate in GDP during 2014-15 is estimated at 7.4 per cent as compared 6.9 per cent in 2013-14,” the CSO said.
The data further showed that GDP at current prices in 2014-15 is likely to attain a level of Rs126.54 lakh crore, up 11.5 per cent from Rs113.45 lakh crore in 2013-14. The per capita net national income during 2014-15 is estimated to be Rs88,538, up 10.1 per cent as compared to Rs80,388 during 2013-14 with the growth rate of 12.3 per cent.
At constant prices, the per capita income (at 2011-12 prices) during 2014-15 is likely to attain a level of Rs 74,193 as compared to Rs69,959 in 2013-14. The growth rate in per capita income is estimated at 6.1 per cent as against the previous estimate of 5.4 per cent. The Gross Value Added (GVA) at basic constant prices (2011-12) is anticipated to increase from Rs91.70 lakh crore in 2013-14 to Rs98.58 lakh crore in 2014-15, according to the data.
The estimated growth in manufacturing, mining and quarrying, electricity, gas and water supply, and construction is estimated to be 6.8 per cent, 2.3 per cent, 9.6 per cent and 4.5 per cent, respectively during 2014-15 as compared to growth of 5.3 per cent, 5.4 per cent, 4.8 per cent and 2.5 per cent, respectively, in 2013-14.
In the third quarter of the fiscal, growth in agricultural sector contracted by 0.4 per cent as against a growth of 3.8 per cent in the corresponding period last year. Mining and quarrying sector too expanded at a slower rate of 2.9 per cent as compared to 4.2 per cent as against 4.2 per cent in third quarter of last fiscal. Manufacturing too slowed to 4.2 per cent as against a growth of 5.9 per cent registered year-on-year.