national income, consumption expenditure, saving and capital formation
for 2010-11 today. Savings and investment data for 2010-11 are new and
all other data are revisions to earlier releases. GDP at factor cost
at constant (2004-05) prices (real GDP) grew by 8.4 per cent in
2010-11. This growth was at the same level of 8.4 per cent in 2009-10.
(As per earlier data real GDP growth was 8.5 per cent and 8.0 per cent
in 2010-11 and 2009-10). Demand side GDP at constant market prices
grew by 9.6 per cent in 2010-11 over a level of growth of 8.2 per cent
in 2009-10.
Agriculture and Allied sector registered a growth of 7.0 per cent in
2010-11 as against 1.0 per cent in 2009-10. The rate of growth of
industry and services sector was 7.2 per cent and 9.3 per cent
respectively for 2010-11. The growth rate for these sectors was 8.4
per cent and 10.5 per cent respectively in the year 2009-10.
• Savings rate is placed at 32.3 per cent in 2010-11 and 33.8 per cent
in 2009-10 (33.7 per cent earlier reported). The decrease mainly owes
to decrease in financial savings of household sector.
• Gross Domestic Capital formation (rate of investment) is placed at
35.1 per cent in 2010-11 as against a level of 36.6 per cent in
2009-10.
Outlook The Ministry of Finance will have a reasonably fair idea about
the way the economy is going to perform in the current year, when the
CSO is going to release the Advance Estimates for 2011-12. The growth
achieved during the first half of the current year was 7.3 per cent
and in the Mid-Year Analysis, we had stated that the economy is going
to grow at 7.5 +/- 0.25 per cent in the full year.
Regarding the outlook for 2012-13, the Ministry expects the economy to
grow faster than the current year but not substantially so. There are
reasons to believe that we are on a path of cyclical upswing. Some of
these are detailed below.
There was a sharp improvement in industrial performance in November,
2011 and overall growth bounced back to 5.9% compared to a contraction
of 4.7% growth in October, 2011. The reversal of the growth from
negative to positive was largely on account of the rebound in the
growth of manufacturing sector which increased to 6.6% in November,
2011 compared to a contraction of 5.7 in October, 2011.
While overall, growth may continue to remain lower than the growth
achieved in the previous year, there are certain positive signs which
indicate a continuing momentum in the industrial sector particularly
the manufacturing sector.
The sectoral deployment of bank credit indicates that credit growth to
manufacturing at 21.8% year on year in November, 2011 is higher than
the rate of growth of credit in November, 2010. In the financial year
(April-November), so far the credit growth to manufacturing sector has
been 9.1% compared to a credit growth of 5.9% in 2010, 4.8% in 2009.
Credit growth has been fairly robust in sectors like mining &
quarrying, paper and paper products, petroleum products, glass and
glassware, basic metals, transport equipments & parts and Gems and
jewellery.
HSBC seasonally adjusted Purchasing Managers' Index also had an upward
movement in manufacturing sector during December 2011 and indicated
the strongest business conditions in December, 2011 since June 2011.
HSBC PMI also indicates higher demand from domestic and foreign
clients in December, 2011 and suggests that the momentum, in
manufacturing sector is not quite weak as suggested by other
indicators.
UBS Lead Economic Index (LEI), a proxy lead indicator of Industrial
Production (IP) bounced in December 2011 after moving downhill for
well over a year, driven by rise in real M1.
Eight core industries, the earliest indicator of industrial
performance, have recorded a growth of 3.8% in December, 2011 with a
growth during the current financial year so far at 4.4%. There has
been a rebound in the coal production. Production of coal in December,
2011 at 52.8 million tons is close to 80% higher compared to
production of 29.7 million tons in September, 2011. There has also
been upsurge in cement production with a growth 16.6% in November 2011
and 13.3% in December, 2011. Electricity sector has also continued to
do very well in the current year with a growth of 9.2% in
April-December 2011 compared to a growth of 4.7% in April-December,
2010.
Another factor that could lead to resurgence is the outlook for
inflation. With the recent moderation in the WPI and expected decline
in the months to come with attendant implications for monetary policy,
the investment could pick up momentum.
No comments:
Post a Comment