India's economic growth gained traction in the fourth quarter of the fiscal year 2009-10, as the agriculture sector registered a growth even as industry and services witnessed an improvement in their respective output for the January to March period, data released by the Government showed on Monday.
What the acceleration in economic activity in the fourth quarter means is that GDP growth for the year ended March 2010 has surpassed the CSO estimates announced in February. That is not all. The Centre also revised the GDP growth for the October-December 2009 period.
There is one flip side to the faster pace of growth though. The RBI may shun reluctance in raising policy rates more aggressively to rein in stubbornly high inflation. Whether the central bank takes the cue from the GDP numbers or not remains to be seen as it also has to contend with the simmering euro-zone debt crisis.
Coming back to the Q4 FY10 data, GDP grew by 8.6% as against 6.5% in the immediately previous quarter and 5.8% in the same quarter last year. The reading more or less matched average consensus estimates.
The farm sector growth stood at 0.7% in Q4 versus a contraction of 1.8% in Q3 and a 3.3% growth in the year-ago period. Manufacturing sector output expanded by 16.3% compared to 13.8% in the third quarter and just 0.6% in the same quarter of FY09. Mining sector saw its output grow by 14% in Q4 as against 9.6% in Q3 and -0.3% in the corresponding period last year.
The construction sector's output grew by 8.7% in Q4 versus 8.1% in Q3 and 5.7% in the same quarter a year earlier. Growth in Trade, Hotels, Transport & Communications sector was at 12.4% in Q4 compared to 10.2% in Q3 and 5.7% in the year-ago period. Finance, Insurance & Real Estate sector's output grew by 7.9% in Q4, the same as in Q3, though it was down from 12.3% in Q4 FY09.
Growth in Community, Social & Personal Services stood at 1.6% in Q4 as against 0.8% in Q3 and 8.8% in the same quarter of the last fiscal year.
GDP at factor cost at constant (2004-05) prices in the year 2009-10 is now estimated at Rs44,64,081 crore (as against Rs44,53,064 crore estimated on Feb 8), showing a growth rate of 7.4% (versus 7.2% forecast in the Advance Estimates) over the Quick Estimates of GDP for the year 2008-09 of Rs41,54,973 crore.
Revised Estimates of GDP at Factor Cost by Economic Activity (At 2004-05 prices)
| Industry |
2009-10 (%) |
2008-09 (%) |
| Agriculture |
0.2 |
1.6 |
| Mining |
10.6 |
1.6 |
| Manufacturing |
10.8 |
3.2 |
| Electricity |
6.5 |
3.9 |
| Construction |
6.5 |
5.9 |
| Trade, Hotels, Transport & Telecom |
9.3 |
7.6 |
| Finance, Insurance, Real Estate & Business services |
9.7 |
10.1 |
| Community, Social and Personal services |
5.6 |
13.9 |
| Total |
7.4 |
6.7 |
Source: CSO.