Q4FY12 GDP at 5.3%; the lowest in last nine years

 Q4FY12 GDP at 5.3%; the lowest in last nine years 

India's GDP to grow by 6.9% in FY12: Govt

The Indian economy is likely to grow by 6.9% in the ongoing fiscal year, as aggressive monetary tightening by the RBI, coupled with a bloated fiscal deficit and slowing global growth hurt domestic investments and consumer demand. The Government today released it's advance GDP estimate for the year ending on March 31, 2012. India's GDP is expected to expand by 6.9% in FY12 as against a healthy 8.4% in the last two years. The Indian economy had expanded by a modest 6.7% in FY09 in the wake of the global financial crisis. Srikant Kumar Jena, Minister of State (Independent charge), Ministry of Statistics & Programme Implementation released the advance estimates of national income 2011-12. The ‘Agriculture, Forestry and Fishing’ sector has shown a growth of 2.5% during 2011-12, as against 7% growth rate clocked in the corresponding period of last fiscal year. Growth in Mining and Quarrying is estimated at -2.2% (5%) during 2011-12 while the Manufacturing sector is estimated to grow by 3.9% during 2011-12. Construction sector is likely to expand by 4.8% in FY12 versus 8% last year. The GDP growth rate of 6.9% during FY12 has been due to an 8% growth rate in ‘Electricity, Gas & Water Supply’, 'Trade, Hotels, Transport & Communication`, and 'Financing, Insurance, Real Estate and Business Services'.

India GDP

India GDP

Dr. Rangarajan too sees GDP growth below 8%

The Indian economy will grow at less than 8% rate in the current fiscal year due to a sharp slowdown in the industrial production, Chairman of the Prime Minister’s Economic Advisory Council (PMEAC) Dr. C. Rangarajan said on Thursday. The PMEAC, which provides economic forecasts twice a year, has predicted a growth of 8.2% for the fiscal year ending in March 2012. Finance Minister Pranab Mukherjee on Wednesday said that India's economy will grow less than 8% in the current fiscal year. Dr. Rangarajan said that the Government needs to use both fiscal and monetary tools to rein in inflation to maintain high growth. "When inflation is remaining at the level which is way above the comfort level of central bank, therefore in that situation it becomes absolutely essential for the central bank to act," Rangarajan said at a conference in New Delhi.

FY12 GDP may miss Govt projection: FM

India’s GDP growth in the current fiscal year will be lower than the Government’s earlier projection owing to hardening spiraling inflation, interest rates and global turmoil, Finance Minister Pranab Mukherjee said on Wednesday. "Most of us are expecting India's growth to go down below 8 percent. This is disappointing," Mukherjee told a news conference. "But if we can, we must not lose perspective of the global situation. There is slowdown all over the world."

India’s Q1 GDP grows 6.1% grows

India's economy seemed to pick up some pace in the first quarter of the current fiscal year, bolstered by strong growth in the services even as growth in agriculture and industry remained rather anemic. The slew of fiscal and monetary steps taken by the Government and the RBI over the past several months held things together even as corporates and households tightened their purse strings. The big challenge for policymakers will come in the next few months, as a poor monsoon threatens to upset the recovery process later in the year and the specter of inflation looms large on the horizon. Though most economists expect monetary tightening measures to kick in only in 2010, the central bank could spring a surprise if inflation flares up.

The gross domestic product (GDP) Q1 FY10 grew by 6.1% as against average expectations of a growth rate of 6.2%. GDP growth rate in the same period last year was 7.8%. In the fourth quarter of FY09, the Indian economy had grown by 5.8%. The Industry sector grew by 5% as against 6.1% in the same quarter last year while Services rose by 7.8% versus 10.2% in the first quarter last year. Agriculture sector expanded by 2.4% in quarter ended June 2009 as against 3% in the same quarter a year earlier.

The quality of growth continued to improve, with contribution from government expenditure declining for the second consecutive quarter. Growth in community, social and personal services as well as government consumption was lower than in the previous two quarters, indicating relatively higher contribution from the private sector. Still, a drought like situation could mean that FY10 full-year GDP growth will be lower than FY09. Last week, the RBI had warned the poor monsoon was more likely to drive inflation than to curb growth. Last month, the central bank estimated growth during FY10 at 6% with an upward bias. The Finance Minister said last week growth could rebound to 8% next year.

Challenge is to maintain growth: Rakesh Mohan

The biggest challenge for India’s new government is managing the impact of the global financial crisis and maintaining growth, Reserve Bank of India Deputy Governor Rakesh Mohan said.

“The most challenging task for the new government is keeping up the growth momentum while the rest of the world is actually suffering recession, or negative growth,” Mohan told reporters today in Mumbai. “We have to continue being pragmatic and do whatever is necessary.”

Maintaining growth with low inflation and keeping prices and the financial markets stable are the key objectives of the nation’s central bank, Mohan said.

“Price stability is not an issue at the moment because we have low inflation,” Mohan said. “We are unlike the rest of the world as our markets have been functioning well though there has been a greater degree of volatility than usual.”

India’s money, foreign exchange and capital markets have been functioning well, Mohan said. “Uncertainty in the world is still very high and we cannot ignore the fact that we are more integrated than we used to be,” he said.

GDP grew 5.8% in Jan-March quarter

India’s economy expanded 5.8% in the three months to March 31. This matched the revised gain of the previous quarter. This growth is however, still at almost half the pace at which India expanded in the past five years . The Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation, has released the revised estimates of national income for the financial year 2008-09 and the quarterly estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2008-09, both at constant (1999-2000) and current prices.

GDP at factor cost at constant (1999-2000) prices in Q4 of 2008-09 is estimated at Rs9,029.24bn , as against Rs8,537.85bn in Q4 of 2007-08, showing a growth rate of 5.8%. The sectors which registered significant growth rates in Q4 of FY09 over Q4 of FY08 are ‘construction’ at 6.8%, 'trade, hotels, transport and communication' at 6.3%, 'financing, insurance, real estate and business services' at 9.5%, and 'community, social and personal services' at 12.5%.

Event Calendar, Bharti Aritel, GMR Infrastructure, Life Insurance, GDP

Event Calendar, Bharti Aritel, GMR Infrastructure, Life Insurance, GDP

India's scorching economic growth is estimated to slow sharply in the current fiscal year ending next month due to weak performance of the agriculture and manufacturing sectors, the Government said. However, the forecast by the Central Statistical Organisation (CSO) is still better than economists' consensus projection. The Gross Domestic Product (GDP) is estimated to have grown by 7.1% in the year ending March 31, 2009 as against a healthy 9% expansion in the previous financial year, the CSO said.

Agriculture sector is likely to grow by 2.6% versus 4.9% in the year ended March 2008. Manufacturing is forecast to have expanded by 4.1% compared to 8.2% in the year 2007-08. Services is expected to maintain a strong growth at 9.6% versus 10.9% in the previous fiscal year. Mining is estimated to grow at 4.7% as against 3.3% in the year ended March 31, 2008. Construction growth is seen at 6.5% compared to 10.1% last year while Financial Services sector is expected to grow by 8.6% versus 11.7% in the last financial year.

GDP Q1FY09

GDP Q1FY09

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GDP falls sharply in first quarter

The Indian economy grew at the slowest pace in three and a half years in the April-June quarter, as a spiraling inflation coupled with rising interest rates sapped consumer demand and curbed corporate investments. GDP in the fiscal first quarter grew by 7.9% as against 8.8% in the fourth quarter of the last fiscal year, the Central Statistical Organisation (CSO) said. The Indian economy had expanded by an impressive 9.2% in the first quarter of the previous fiscal year. GDP growth in Asia's fourth-biggest economy fell below the 8% mark after nine quarters.

Growth in the manufacturing sector slumped to 5.6% from 10.9% in the same quarter last year. Agriculture growth too slid to 3% versus 4.4% in the year-ago period. The construction sector did relatively better, posting a strong growth of 11.4% compared to 7.7%. The mining sector grew by 4.8% in Q1 FY09 versus 1.7% in the year-ago period, while electricity expanded by 2.6% as against 7.9% in the first quarter last year. Trade, hotels, transport & communications grew at 11.2% (13.1%) and finance, insurance, real estate & business services rose by 9.3% (12.6%).

PM's economy panel cuts GDP growth target

The Prime Minister's Economic Advisory Council (EAC) said it was pruning its GDP growth projection for the year 2008-09 while proposing more monetary tightening to bring down inflation from a 13-year high. India's economy is expected to grow by 7.7% in the fiscal year ending March 2009, while inflation can be lowered to 8-9% during the same period through tighter monetary stance, the EAC said.

The high-level panel, headed by former RBI Governor C. Rangarajan, expects India's agriculture sector to grow at 2% in FY09 while manufacturing and services sectors are forecast to expand by 7.5% and 9.6%, respectively. The announcement comes two weeks after the Reserve Bank of India (RBI) trimmed its GDP growth forecast for the current fiscal year, from 8-8.5% to 8%, and raised the inflation target for the year to 7% from 5-5.5%.

In its economic outlook for FY09, the Prime Minister's panel said an adverse global economic environment was expected to lower growth in India, widen the current account deficit and pressure the fiscal situation through widening subsidy bills. The EAC sees savings rate at 34.5% of GDP in FY09 whereas the investment rate has been pegged at 37.5%. Capital inflows in the current financial year are expected to touch US$70bn, the Prime Minister's panel said.

The panel said fiscal deficit for FY09 would overshoot the annual target while revenue deficit would persist. It added that serious fiscal risks were arising from growing off-budget liabilities estimated at 5% of GDP. The mounting subsidies are adding to the pressure on Government finances, the EAC said, adding that fuel prices need to be raised regularly to curb fiscal deficit. The current account gap is estimated at 3.2% of GDP.

GDP to slow in FY08; but FM sees better days

The Indian economy is expected to slow in the current fiscal year as a series of monetary tightening steps coupled with the rupee's appreciation has hurt consumer and industrial demand in Asia's fourth-largest economy. The GDP for the year ending March 31 is estimated to grow at 8.7%, the Central Statistical Organisation (CSO) said. This is much lower compared to the 9.6% growth rate of the previous financial year. The advance estimate for FY08 is in line with average forecast of economists, but is a little higher than the 8.5% projected by the Reserve Bank of India (RBI).

The manufacturing sector is expected to grow by 9.4% versus 12% in the previous fiscal year. The construction sector is also likely to witness a drop in its growth rate at 9.6% as against 12% last year. Growth in electricity, gas and water supply is likely to be higher at 7.8% compared to 6% last year. Trade, hotels, transport & communication will grow by 12.1% as against 11.8% in FY07. Finance, insurance, real estate & business services' growth will slow to 11.7% from 13.9% in the previous fiscal year. The agriculture sector is likely to show a growth rate of 2.6% in its GDP during 2007-08 as against 3.8% in the previous fiscal year.

Reacting to the advance estimates of national income, Finance Minister P. Chidambaram said he was confident that the Indian economy will grow at close to 9% rate this fiscal. "I am reasonably confident that figures may be revised and economy will grow at close to nine per cent," Chidambaram said. "The CSO figures are lower than what I had anticipated. We are disappointed but not despondent," he said. Poor figures are mainly because of projected low rate in the agriculture sector, Chidambaram said, adding that like all estimates, these will also be revised upwards.

GDP grows highest in the past 18 years

The Economy grew an impressive 9.6% in 2006-07, the highest in the past 18 years. Releasing the revised estimates here on Thursday, finance minister P Chidambaram said the government was confident of achieving "a close-to-9%" growth rate in the current fiscal.

This translates into an almost Rs 1,700 rise in every Indian's annual income. Per capita income, or the income each citizen would receive if national income were equally distributed, grew at 8.1% to Rs 22,553 in 2006-07, from Rs 20,858, in 2005-06.

Chidambaram said despite growing uncertainty and turbulence in global Markets, the Indian Economy was estimated to grow at near-9% in 2007-08, although the government may need to make 'rapid adjustments' in policy, depending upon the global situation. "Which side of 9% it is difficult to say," the minister told reporters. He added that he would be doubly happy if it was to the right side of 9%.

The government's Central Statistical Organisation (CSO) had earlier estimated growth in gross domestic product (GDP)—a measure of overall domestic income—at 9.4% for 2006-07. The upward revision comes as a result of higher growth in the banking & insurance sector at 13.9%, instead of the estimated 10.6%.

CSO has also revised the growth estimate for 2005-06 to 9.4% from 9%. The revised data puts the Economy's average growth rate over the past four years since the UPA government has been in power at 8.8%.

"This shows that since the United Progressive Alliance came to power, there has been an investment boom. People are investing and they have confidence in the future," Chidambaram said. "Domestic investment has been high and foreign direct investment also played its part."

Sector-wise, while growth in manufacturing has slightly eased, construction has improved to 12% from 10.7%.

Core sector growth slows to 6.3% in July

A substantial slowdown in coal, steel and petroleum refining production led to a decline in overall growth in the six core infrastructure sectors to 6.3% in July 2007, as against 10.9% in the same month last year. For the four month period till July this financial year, core sector growth rate declined to 6.1%, as against 8.7% in the same period in 2006-07.

Crude petroleum production registered a decline in growth at 0.9% in July, down from 4.1%, while petroleum refinery production dipped to 4.6% from 12.6% in July 2006. Coal production growth declined to 1.1%, a significant fall from the 9.1% growth witnessed in July last. Electricity generation registered a growth of 7.5% in the month under review, compared to 8.9% in July 2006. Cement production grew 9%, as against 14% same month last year, while finished (carbon) steel production grew 7.9% versus 15%.

The infrastructure sectors accounts for 26.7% of the Index of Industrial Production (IIP). The data came a day after IIP data showed that overall industrial growth slowed sharply this July, providing further evidence of a moderation in economic activity on account of a tight monetary policy and a perceptible slowdown in consumer spending.

The IIP rose 7.1% in July, as against 13.2% in July 2006. This has been the slowest growth in the index in the last nine months. It had slumped to 4.4% last October.

Recently, Finance Minister P. Chidambaram had written to Prime Minister Manmohan Singh apprising him of the slowdown in key infrastructure sectors and said that bottlenecks to production in these areas must be removed.

"Our assessment is that there has been a slow down in key infrastructure sectors. While there is no evidence of a slow down in investment, bottlenecks to enhanced production need to be addressed and removed."

India Shining - April-June GDP grows 9.3 per cent

India's economy in the April-June quarter grew a faster-than-expected 9.3 per cent from a year earlier, led by robust manufacturing and services, but analysts said the pace could moderate in coming quarters.

The annual growth rate for India's fiscal first quarter published on Friday topped both a median forecast of 8.9
percent in a poll and growth of 9.1 per cent the previous quarter.

The stock market extended its strong opening gains after the data. The rupee was little changed around 41.02
per dollar, and the benchmark 10-year bond edged up 1 basis point to 7.92 percent.

Analysts said the strong growth did not mean the central bank was likely to resume raising interest rates, but said it showed the need for vigilance against a build-up of price pressures.

"This number is good, but does not suggest any need for monetary tightening and we expect the current stance to
continue as inflation has come off substantially," said JP Morgan economist Rajeev Malik.

"We see moderation in growth in coming quarters."

Manufacturing grew an annual 11.9 percent in the April-June quarter, lower than the 12.4 percent in the previous three months.

Services grew at an annual pace of 10.6 percent, while farming, which the government is trying to revive, expanded by 3.8 per cent, matching the previous quarter's growth rate.

Asia's third-largest economy grew 9.4 percent in the fiscal year that ended March 2007, its fastest rate in 18 years, and the central bank expects expansion of 8.5 percent this fiscal year.

The central bank raised interest rates five times between June 2006 and March this year and has also increased banks' reserve requirements, measures that have cooled the property market and calmed inflation and loan demand.

"Growth will be about 9 percent in the coming quarters. There is no need to change the monetary stance, but there has to be a close monitoring," said Saumitra Chaudhuri, economic adviser at domestic ratings agency ICRA.

India is now a $1 trillion economy after a growth spurt in the past four years second only to China's hot pace of
expansion among major economies. This has given it increasing muscle in world trade talks and seen it invited to meetings of the world's leading industrialised economies.

The central bank said on Thursday India was on the verge of a step-up in its growth trajectory but only if accompanied by vigilance on price and financial stability.

Some economists see the economy averaging 7-8 percent for the next few years due to private sector expansion and rising demand from a growing middle class.

Analysts say this will buttress the domestic economy in the event of a slowdown in demand around the world due to problems in the US home loan market.

The scorching pace has generated jobs but it has also put pressure on roads, ports and other infrastructure, and increased wage and price pressures

Market Cap crosses country's GDP

For the first time in India’s history, the market capitalisation of the BSE has crossed the country’s domestic GDP. The total listed market cap touched Rs 33 lakh crore on Friday, eclipsing the GDP figure of around Rs 32 lakh crore during FY06. The market cap for all listed BSE stocks rose to Rs 34 lakh crore on Monday.

India has become the first BRIC country where the market cap of the companies listed on the stock exchange exceeds the GDP of that country. India now joins an exclusive club of developed markets, including the US and the UK along with a few emerging economies such as South Africa, Malaysia and Singapore.