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Govt revises economic growth rate down to 8.4% for 2010-11

31 Jan 2012 Evaluate

The government has revised the economic growth rate for 2010-11 financial year to 8.4% from the earlier estimate of 8.5%, mainly on the back of uncertain global economic conditions, high interest rates and other domestic factors. As per the quick estimates released by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, estimates of GDP growth for the year 2010-11 have been revised to 8.4% from the earlier 8.5%. 

The ministry stated that the revision has been done on account of using the new series of the Index of Industrial Production (IIP) with base 2004-05 and also subsequent revision in Wholesale Price Index (WPI). Further, the revision in estimates is also done based on the availability of latest data on agricultural production, industrial production, government expenditure and also detailed and more comprehensive data available from various source agencies.

The growth rate of 8.4% in the GDP has been achieved due to high growth in transport, storage and communication (14.7%), financing, insurance, real estate & business services (10.4%), trade, hotels & restaurants (9.0%), and construction (8.0%). Further, the primary sector (agriculture, forestry & fishing) has shown an impressive growth of 7.0% during 2010-11 as against 1.0% during the year 2009-10. The growth of secondary sector (manufacturing and construction) was 7.2% and that of service sector was 9.3% during 2010-11.

The per capita income, in real terms, has gone up to Rs 35,993 for 2010-11, registering a growth of 6.4% as compared to 2009-10. Gross domestic savings (GDS) as percentage of GDP declined to 32.3% of GDP at market prices as against 33.8% in the 2009-2010. The decrease in the rate of GDS has been mainly due to the decrease in the rates of financial savings of household sector and private corporate sector.

The rate of Gross Capital Formation, at constant (2004-05) prices, has dropped to 37.7% in 2010-11 as against 38.5% in 2009-10. As per the data, the GDP at constant prices at market prices during the year 2010-11 has grown at 9.6%. In addition, the GDP growth estimate for FY09-10 has been revised upward to 8.4% from the previous estimate of 8%. Furthermore, electricity, gas and water production recorded 3% growth in FY11, compared to 6.3% expansion in FY10.

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