Farm sector to push growth to 4.9 per cent in 2013-14

PTI | DECCAN CHRONICLE
Published Feb 8, 2014, 2:49 am IST
Updated Mar 19, 2019, 8:48 am IST
Finance Minister P. Chidambaram expresses satisfaction over the growth projections for 2013-14.
 Finance Minister P. Chidambaram expresses satisfaction over the growth projections for 2013-14.

New Delhi: Buoyed by good performance of the farm sector, economic growth in the current fiscal is estimated to rise to 4.9 per cent, though it is below potential as manufacturing and mining sectors continue to remain a cause of concern.

"The growth in GDP during 2013-14 is estimated at 4.9 per cent as compared to the growth rate of 4.5 per cent in 2012-13," according to advanced estimates released Friday by the Central Statistics Office (CSO).

Part of the improvement can be attributed to statistical reasons as the CSO had earlier lowered growth for 2012-13 fiscal to 4.5 per cent in its revised estimates from an earlier provisional forecast of 5 per cent.

While the Chairman of the Prime Minister's Economic Advisory Council C Rangarajan described it as "encouraging news...indicating that (economic) slowdown has bottomed out,"the India Inc said the growth was below potential and the government would need to take steps to boost manufacturing which showed a contraction of 0.2 per cent.

"The GDP estimates (are) still below potential...What is worrisome is the poor performance estimated in the mining and manufacturing sectors which are in the red. The growth rate would have been lower had it not been for the favourable base effect of last year," CII Director General Chandrajit Banerjee said while commenting on advance GDP estimates of the CSO.

However, as per the CSO estimates, India is poised to become a USD 1.7 trillion economy and per capita income will soar by 10.4 per cent to Rs 74,920 in 2013-14. For 2013-14, the CSO has projected a growth rate of 4.6 per cent in agriculture and allied sectors, up from 1.4 per cent a year earlier.

Manufacturing, however, is expected to register a contraction of 0.2 per cent in this financial year compared with growth of 1.1 per cent in the previous year. Mining and quarrying is likely to contract 1.9 per cent, compared with a 2.2 per cent decline in production a year ago.

The latest estimate of 4.9 per cent for 2013-14 implies that the pace of economic expansion improved in the second half, given that GDP grew 4.6 per cent in the April-September period. "To achieve higher growth going forward, the principles of sound governance, clear policies and effective implementation should be adhered to.

Also, there is a need to shift to time-bound decisions over time-bound actions " said FICCI President Sidharth Birla while commenting on CSO estimates. CRISIL's Chief Economist D K Joshi said, "Manufacturing and mining sectors are in bad shape which is worrying for development."

According to the advance estimates, the services sector, including finance, insurance, real estate and business services sectors, is likely to grow 11.2 per cent this year compared with 10.9 per cent in 2012-13. Growth in construction is likely to improve to 1.7 per cent from 1.1 per cent in 2012-13.

According to the CSO's advance estimates, growth in electricity, gas and water production is likely to improve to 6 per cent in 2013-14 from 2.3 per cent in 2012-13. The trade, hotel, transport and communication sectors are projected to grow by 3.5 per cent, as against 5.1 per cent in the previous financial year. Community social and personal services growth would be better at 7.4 per cent, compared with 5.3 per cent previously.

The CSO releases advance GDP estimates before the end of the financial year to enable the government to formulate various estimates for inclusion in the Budget. Per capita income in real terms (at 2004-05 prices) during 2013-14 is likely to attain a level of Rs 39,961 as compared to the first revised estimate for the year 2012-13 of Rs 38,856.

The growth rate in per capita income is estimated at 2.8 per cent as against the previous year's estimate of 2.1 per cent, the CSO said. Per capita income at current prices during 2013-14 is estimated to be at Rs 74,920 compared to Rs 67,839 during 2012-13, a rise of 10.4 per cent.

Gross Fixed Capital Formation (GFCF), an indicator of investment, is forecast at Rs 32.2 lakh crore at current prices as against Rs 30.7 lakh crore in 2012-13 fiscal. At constant (2004-05) prices, GFCF is estimated at Rs 20.1 lakh crore in 2013-14 as against Rs 20.0 lakh crore.

In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during 2013-14 are estimated at 28.5 per cent and 32.5 per cent, respectively. The corresponding rates were 30.4 per cent and 33.9 per cent, respectively in 2012-13 fiscal. The rate of expenditure on valuables at current prices has gone down from 2.6 per cent in 2012-13 to 2.1 per cent in 2013-14, the statement added.

Next: FM satisfied with 4.9% growth, expects pick up in next fiscal 

FM satisfied with 4.9% growth, expects pick up in next fiscal 

New Delhi: Finance Minister P. Chidambaram on Friday expressed satisfaction over the growth projections for 2013-14 and exuded confidence that it will improve significantly in the next fiscal. Commenting on the CSO figures that projected a growth of 4.9 per cent GDP in the current fiscal, he said, "This means that growth in the second half of 2013-14 has been better than growth in the first half of the fiscal."

The growth rate in the first half (April-September) in 2013-14 was 4.6 per cent. "We had anticipated that growth in the second half will improve and I am happy that our estimate has come true. This estimate of 4.9 per cent for the whole year will in all likelihood be revised upwards in the first, second and final revisions over the next two years. "I am confident that the final estimate will be not less than 5 per cent for the whole year", he told PTI.

Chidambaram said he was particularly happy that agriculture growth has been estimated at 4.6 per cent for 2013-14. "This is a vindication of the policies pursued by the UPA government including higher minimum support price, subsidy to fertiliser, enhanced credit to farmers, provision of quality seeds, etc.", he said.

Going forward, he said, "I am confident that growth in 2014-15 will show a significant improvement over 2013-14." As per the CSO estimates, the GDP in the current fiscal will improve to 4.9 per cent from 4.5 per cent a year ago, mainly on account of the good performance of the farm sector. 

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