The Indian economy is booming. The country’s GDP grew a robust 8.9% in the first quarter of this fiscal, the highest in comparable quarters since 1999-2000. Inflation dipped for three consecutive weeks to 4.56% for the week ended September 16.
The GDP spurt was on the back of a very strong 11.3% growth in manufacturing. Services continued to do well with a 10.6% growth in output, against 9.8% a year ago.
But agriculture stayed sluggish with 3.4% growth, the same rate at which it grew in the corresponding period last year. The GDP growth reported in the corresponding period last fiscal was 8.5%.
Commenting on the high GDP growth in Q1, finance minister P Chidambaram said, “Since 2004-05, GDP has grown at 7% plus every quarter except Q2 of 2004-05. In the last five quarters, growth has moved up a notch.”
With sound economic policies and fiscal prudence, the GDP growth could be maintained at 8% or above every quarter, he said, adding pushing financial sector reforms was vital for sustaining the momentum. The finance minister said maintaining GDP growth at current level was contingent on “adequate credit flow to productive sectors at reasonable rates.”