GDP growth slows to 8.4 per cent in Q3 of FY'08

GDP growth slows to 8.4 per cent in Q3 of FY'08

New Delhi: Confirming fears of a slow down expressed in the Economic Survey, India's GDP expanded by a tardy 8.4 per cent in the third quarter of 2007-08 primarily due to sluggishness in manufacturing and construction sectors. According to quarterly estimates of Gross Domestic Product (GDP) released by the government on Feb 29, October-December quarter was the worst in 2007-08 in terms of economic growth (8.4 per cent), which in turn can pull down full year growth to 8.7 per cent as feared by the Economic Survey.

While the growth rate of the manufacturing sector came down to 9.3 per cent during October-December 2007 from 11.3 per cent in the corresponding period previous year, the construction sector growth rate dipped to 8.4 per cent from 10.8 per cent during the same period. The Economic Survey, tabled by Finance Minister P Chidambaram in Parliament on Thursday, had said growth would fall to 8.7 per cent as the economy faced the challenges of poor performance by infrastructure and industrial sectors

The GDP growth rate during nine-month period (April-December 2007) worked out to be 8.9 per cent down from 9.6 per cent during the corresponding period last year. The agriculture and allied sector growth rate during Q3 declined to 3.2 per cent from 3.4 per cent in the corresponding quarter in the last fiscal. The GDP growth rate was 9.3 per cent in the first quarter of this fiscal before it dipped to 8.9 per cent in Q2. The third quarter of 2007-08 is also the worst quarter in terms of growth since April 2006.

Budget to stimulate investment, growth: Chidambaram

New Delhi: Finance Minister P Chidambaram on Feb 29 said the Union Budget for 2008-09 would stimulate investment and consequently growth, while pointing out that he had done the best through the budgetary exercise by providing credit facilities to the farm sector. Credit is only one element of the story in the farm sector. I provided more credit. Budget can only address credit side and the farm sector has not done too bad this year, he said in his post-Budget comments. The Finance Minister had announced debt waiver and relief worth Rs 60,000 crore to small and marginal farmers in the Budget, the last full financial statement before the general elections in 2009. This Budget will stimulate investment and growth and that growth will create wealth. The economy is growing by eight per cent, people have become more tax compliant and they are willing to pay taxes, he said on the buoyancy in government's revenues.