Feel good gets double digit boost

Another reason for the high figure is because the base on which it’s calculated was too low in the previous year.

The high GDP has also been made possible by a 7.4 per cent growth in the manufacturing sector.

However, if the GDP has been growing, so has external debt which rose by 6.5 per cent last year to touch $112.10 billion by the end of 2003, mainly due to a surge in NRI deposits.

Figures released by the Finance Ministry show that long-term deposits of NRIs zoomed by 32.5 per cent to $28.96 billion last year pushing up overall external debt. At the same time, the rupee gained strength at Rs 43.70 to a dollar — swadeshi pride and bonanza for foreign travellers, students studying abroad and importers while bad news for exporters and the BPO industry.

With the third quarter figures coming in, the GDP growth so far this year is 8.1 per cent. The GDP growth has been on an upward curve since the first quarter this year with 5.7 per cent in the period April to June and 8.4 per cent between July and September.

Last year the story was quite different, in the October-December quarter or Q3, GDP grew by a mere 2 per cent compared to 5.1 and 5.5 per cent in the previous two quarters.

Said Bibek Debroy, economist with the Rajiv Gandhi foundation: ‘‘Large part of the increased GDP for the third quarter is due to the low base on which agriculture was calculated because agriculture showed negative growth last year due to the drought. Even in manufacturing, the trend is closer to 6.5.’’

According to figures released by the Central Statistical Organisation (CSO), quarterly GDP at factor cost at constant (1993-94) prices for Q3 of 2003-04 is estimated at Rs 3,86,627 crore as against Rs 3,50,290 crore in Q3 of 2002-03, showing a growth rate of 10.4 per cent.

According to information from the department of agriculture and cooperation, the prodution of rice, coarse cereals, pulses and oilseeds increased by 22.3 per cent, 38.3 per cent, 32 per cent and 84.4 per cent respectively during the kharif season of 2003-04.

Production of cotton is also expected to rise by 42.1 percent, while that of sugarcane is expected to decline by 9.3 per cent, during 2003-04 over the estimates of the previous year.

Among other sectors which registered significant growth are ‘‘electricity, gas and water supply,’’ at 5.2 per cent, ‘‘construction’’ at 5.1 per cent, ‘‘trade, hotels, transport and communication’’ at 13.1 per cent and ‘‘financing, insurance, real estate and business services,’’ at 7.7 per cent.

The key indicators of construction sector, namely, cement and finished steel, registered growth rates of 5.6 per cent and 7.1 per cent respectively during April-December of 2003-04 as against the growth rates of 9.7 per cent and 9.1 per cent, respectively in the corresponding period of previous year.