First quarter brings good news: 8.9%

Despite a fall in the growth rate of electricity and construction sectors during the first quarter of 2006-07, the economy was able to record a phenomenal 8.9 per cent growth during the first quarter of financial year 2006-07, bettering the growth of 8.5 per cent during the same period the previous year.

Riding on this growth performance, the finance minister P Chidambaram today called for more "political space" to further the reform process in order to improve India's growth story."Given the performance of the last two and half years of the economy, I wish everyone will cooperate in giving the government political space to implement further economic reforms that are contemplated in NCMP, budget speeches and various pronouncements," he said.

Speaking to reporters on the GDP numbers released today and the reforms needed, Chidambaram said that in a coalition it was very important that "political space is given to the government to undertake further economic reforms" and added that there were many such matters which were pending or were in the pipeline.

While this year there was a drop in the growth of electricity, gas and water supply sector, where this year's first quarter dipped by 2 percentage points from 7.4 per cent in the first quarter of 2005-06, there was a noted improvement in the manufacturing as well as trading sectors during the first quarter of this year.

According to the quarterly growth figures, even the traditionally laggard mining and quarrying sectors improved marginally during the first quarter of this fiscal as compared to the previous year. This sector grew at 3.4 per cent as compared to a growth of 3.1 per cent during the first quarter of 2005-06.

The manufacturing sector grew at 11.3 per cent during the first quarter of this year as against 10.7 per cent of the previous year while the trade sector grew at 13.2 per cent as compared to 11.7 per cent during the first quarter of 2005-06.

... contd.

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