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Journalism of Courage
The GDP growth figures for the first quarter Q1,April-June of 2009-10 are of interest for three related reasons. First,is the worst of the crisis over? That depends a bit on what one means by crisis. There was a short-term credit squeeze that began in September 2008. And there is a longer-term global slowdown. The latter continues,with no immediate signs of recovery,explaining lacklustre export performance. If the credit crunch is identified as a crisis,Q1 of 2009-10 should be better than Q3 and Q4 of 2008-09 and CSO figures show this is true. 6.1 per cent is best of three quarters,though significantly lower than 7.8 per cent in Q1 of 2008-09. The dip in growth in 2009-10 compared to 2008-09 is particularly marked for manufacturing and services and has been neutralised somewhat by mining.
Second,what are growth prospects in 2009-10? Before the drought spectre,most forecasts for the full year were around 6.5 per cent with 6 per cent for the first half and 7 per cent for the second,though the government had a more optimistic 7 per cent for the entire year. Q1 figures vindicate 6-per-cent-for-first-half proposition. But that was before the drought. It is still too early to gauge the full impact of the drought,with state proclivities towards declaring districts drought-affected in search of Central assistance. With agricultures share declining and rabi sometimes compensating for kharif,it is unlikely the drought will shave off much from GDP growth,perhaps no more than 0.5 per cent. Upward pressure on prices of edible oils,pulses or sugar is more a sectoral issue. Therefore,6 per cent GDP growth for the entire year is as good a guess as any and thats roughly what the Planning Commission has been suggesting.
