13.6% Growth In Manufacturing Sector Buoys Gdp In 95-96

The country's gross domestic product (GDP) grew by 7.1 per cent in 1995-96, with the enhanced performance of the manufacturing and service sectors, particularly communications, more than offsetting the decline in the agricultural sector.

While agriculture declined by 0.4 per cent, manufacturing sector registered a rise of 13.6 per cent and the services sector was buoyed by an 18.4 per cent growth in communications.

Quick estimates released by the CSO confirm the revised estimates put out in July last year which maintained that the GDP growth would be 7 per cent in 1995-96 and not 6.2 per cent as claimed in the advance estimates.

 

Government officials maintained that it was not possible to say from the trends whether a structural shift in the economy had been achieved, but argued that the surge in communications was on account of "liberalisation". They also declined to comment on the projected GDP growth of 6.6 per cent in 1996-97. At factor cost and constant prices (1980-81), the GDP in 1995-96 is estimated at Rs 274,209 crore against Rs 256,095 crore in 1994-95, registering a growth of 7.1 per cent during the year against a growth of 7.2 per cent during the previous year.

At current prices, GDP in 1995-96 is estimated at Rs 985,787 crore against Rs 858,340 crore in 1994-95, showing an increase of 14.8 per cent. Gross domestic savings at current prices in 1995-96 amounted to Rs 281,014 crore against Rs 237,840 crore in 1994-95, constituting 25.6 per cent of GDP against 24.9 per cent in the previous year.

Gross capital formation at current prices increased by 27.4 per cent - higher than the rate of saving - to Rs 300,760 crore. The higher rate of capital formation has resulted from the positive net capital inflow from abroad. The inflows jumped from Rs 9,964 crore in 1994-95 to Rs 19,746 crore in 1995-96.

The rise in the gross savings has been contributed by all the institutional sectors, households, private corporate as well as the public sector. Despite a drop in the financial saving from Rs 109,549 crore to Rs 97,197 crore, household savings went up by 17.2 per cent to Rs 214,571 crore in 1995-96 owing to an increase in savings in physical assets.

Savings of the private corporate sector went up by 20.7 per cent to Rs 45,336 crore in 1995-96, while that in the public sector rose by 22.4 per cent to Rs 21,107 crore in the same period.

The higher-than-expected growth during 1995-96 has been mainly due to high growth in manufacturing, electricity, trade, hotels and restaurants, railways and communications. The agriculture and forestry sectors, however, registered a marginal negative growth of 0.3 and 0.6 per cent, respectively.