Industry GDP share down in ’03-04

Analysing the Central Statistical Organisation’s advance estimates, the RBI report explains that a distinct pick-up in growth of real GDP originating in the industry from the second quarter was sustained in the third quarter of 2003-04. Over the period April 2003-February, 2004 industrial production rose faster than in the preceding year due to higher growth in the manufacturing sector.

According to the report, the services sector remained the principal driver of the economy, contributing 57 pc in the growth of real GDP in 2003-04. Agriculture and allied activities contributed 25 pc of real GDP growth, compensating for the negative contribution of 31 pc witnessed in 2002-03.

The share of services in GDP has risen steadily from 47.5 pc in 1992-93 to 56.1 pc in 2003-04. The share of agriculture and allied activities has declined from 31.5 pc of GDP in 1992-93 to 22.2 pc in 2003-04. The share of industry has remained broadly unchanged at 21-22 pc. ‘‘The shifts in sectoral shares reflect the longer-term structural changes that are transforming the Indian economy,’’ the report said.

A sharp acceleration of real GDP commenced from the second quarter, strengthening to reach double-digits in the third quarter of 2003-04. The growth in manufacturing gained in each successive quarter, drawing from the revival of rural demand and exports.

The overall expansion of the services sector was mainly driven by trade, hotels, restaurants, transport and communication. The acceleration in this segment took real GDP growth originating in the services sector to 8.7 pc in third quarter.

In terms of the use-based classification, all sectors except consumer goods showed improved performance during 2003-04. The capital goods sector maintained robust growth for the second year in succession. Consumer durables showed a significant turnaround during 2003-04, facilitated by a increase in retail lending and softening of interest rates.