India's economy grew at a robust 9% during 2005-06, a substantial jump from the 8.4 per cent projection made earlier for the same period.According to the quick estimates released today by the Central Statistical Organisation, the surge in gross domestic product (GDP) during 2005-06 was largely on account of agriculture, which grew at 6.3%. The overall sector, which includes forestry and fishing, clocked a 6% expansion — more than one and a half times larger than the 3.9% shown by the advance estimates.The 2004-05 growth in the sector was nil, while agriculture alone had shrunk by 0.2%.A comparison of the growth figures from the current fiscal with those of 2005-06 released today means that India grew at a phenomenal 9% for two years running. Notably, Finance Minister P Chidambaram said yesterday that he was “reassured by the indicators available to us that growth in the second half of the current fiscal will be close to 9%”, basing his projection on the 9.1% growth rate for the first half of 2006-07. With the revision, the GDP at constant prices stood at Rs 26,04,532 crore in 2005-06 from Rs 23,89,660 crore in 2004-05.“It (the revised figures) augurs well for 2006-07. Although, I must caution we will have to see what will be its impact on growth figures this year as the base figures have been revised,” Chidambaram said after the release.An interesting fact in today’s data is that both savings and investment rates were above the 30% mark in 2005-06. The gross capital formation, which indicates the investment rate in the economy, stood at 32.2% against 30.4 per cent the previous fiscal.Rate hike may make loans costlierMUMBAI: Concerned over surging inflation, RBI on Wednesday hiked the short-term repo rate by 25 basis points to 7.50% while keeping reverse repo, bank rate and CRR unchanged. The central bank’s move may make loans more expensive.
