Indian economy records fastest growth in 18 years


New Delhi : With robust performances by manufacturing and services sectors, India's gross domestic product (GDP) expanded by 9.4 percent in 2006-07 to register the fastest growth in 18 years, official data revealed Thursday.

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The size of the Indian economy is estimated at Rs.28.48 trillion ($694 billion) during 2006-07 against Rs.26.04 trillion ($635 million) in the previous year, as per the revised estimates of the national income.

The GDP had expanded by 9 percent in 2005-06 and 7.5 percent in the year before.

The per capita income has grown by 8.4 percent during the period under review as against 7.4 percent growth in the previous year, showed the data released by the Central Statistical Organisation (CSO).

"I am happy the results we report today confirm our belief that the Indian economy has shifted to a higher growth trajectory," Finance Minister P. Chidambaram said in a statement.

"Time has come to shed lingering doubts about the sustainability of high growth and scepticism about the shift to a higher growth trajectory," he said, adding his government will seek to sustain this expansion in the coming years.

"The latest CSO figures on GDP growth show the robustness and agility of India's manufacturing sector in the face of globalisation," the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement.

In a similar vein the Confederation of Indian Industry (CII) also applauded the robust growth saying it was beyond expectations and gives encouragement to the industry on the prospects for the current year and the future.

At the same time, the chamber hoped the 9.1 percent growth in the last quarter of this fiscal against 10 percent in the like period of 2005-06 did not indicate a slowdown due to measures taken to curb inflation.

"CII's own projection for GDP growth in financial year 07-08 is 9.2 percent with services growth pegged at 11.2 percent, industry at 9.4 percent and agriculture at 3.0 percent," the chamber said in a statement.

The CSO data showed that not all sectors could match the overall performance of the Indian economy during the year under review, with farm and allied sectors growing by just 2.7 percent, as against 6 percent in the previous year.

Similarly, the growth in the mining sector was low at 5.1 percent, against 3.6 percent in the previous year, while the performance of energy sector was slightly better at 7.1 percent, against 5.3 percent in 2005-06.

The best performance among the eight broad sectors was by hospitality, transport and telecom sectors that logged 13 percent growth, followed by 12.3 percent registered by the manufacturing sector and 10.7 percent by the construction industry.