New Delhi, May 31
Buoyed by stupendous performance by the manufacturing and services sector, the country’s economy grew by 9.4 per cent in the fiscal that ended in March, highest in the last 18 years.
The economy also swelled to a trillion dollar, making Indian economy only the 12th nation to reach this milestone. The figures show that India is growing at a pace close to that of China, which last year grew at 10.7 per cent.
It was the economy's strongest performance since 1988-89, when it grew by 10.5 per cent, and beat a government estimate of 9.2 per cent. The economy’s trillion-dollar milestone comes just three days after the Indian stocks’ combined value crossed this level.
"Because we have high growth, we can make bold claim that we will do everything possible to make the growth inclusive," finance minister P Chidambaram said.
"I would argue that the high growth that we have witnessed in the past three years needs to be sustained with utmost care because that is the way forward to eradicate poverty, generate quality jobs and improve human development indicators," he said.
Analysts said the current pace of growth is unlikey to slow down in the next two quarters, inflation is likely to pick up and large capital inflow likely to persist, we expect the RBI to continue to tighten monetary policy.
Chidambaram said “high growth does have an impact on prices of essential commodities. But this can be overcome by matching growth in supply side.”
He said the fiscal deficit was only 3.5 per cent of GDP during the fiscal year down from 4.1 per cent a year earlier and the revenue deficit was 2 per cent.
He said the indirect taxes revenue collection was Rs 2,41,806 crore and direct taxes was Rs 2,30,091 crore.
Despite the high growth curve in different sector, agriculture, which generates almost a quarter of economic activity, grew just 2.7 per cent compared with 6 per cent a year ago.
The sector which showed high growth were manufacturing (12.3 per cent), electricity, gas and water supply (7.4 per cent), construction (10.7 per cent), trade, hotels, transport and communication (13 per cent), financing, insurance, real estate and business services (10.6 per cent) and community, social and personal services (7.8 per cent), the figures released by the Central Statistical Organisation
said.
