Indian economy grows 7.3% in 2014-15; manufacturing, services shine

New Delhi: The Indian economy grew at 7.3 percent in 2014-15 due to improvement in the performance of both services as well as manufacturing sectors. [caption id=“attachment_2265986” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] According to the data release by the Central Statistics Office (CSO) today, the economic growth was 6.9 percent in 2013-14 as per the new series of national accounts with base year of 2011-12. The growth in 2014-15 was lower than the advance estimates of 7.4 percent released in February. The fourth quarter (January-March) of last fiscal saw the economy grow at 7.5 percent, better than 6.6 percent recorded for the previous three months, October-December. The Gross Value Added (GVA), a new concept introduced by CSO to measure the economic activity, rose by 7.2 percent in 2014-15 compared 6.6 percent in the previous fiscal. The manufacturing sector GVA rose by 7.1 per cent during the year as against 5.3 percent in 2013-14. Similarly, the output of electricity, gas, water supply and other utility services rose by 7.9 percent as against 4.8 percent a year ago. The construction activity too registered an increase of 4.8 percent, up from 2.5 percent a year ago. Financial, real estate and professional services also showed an improvement by registering a growth of 11.5 per cent as against 7.9 percent in previous fiscal. However, the farm and allied sectors grew by a meagre 0.2 percent compared to 3.7 percent a year ago. The output of mining and quarrying sector too slipped to 2.4 per cent from 5.4 percent a year ago. The economic growth rate measured in terms of GVA in the January-March quarter improved to 6.1 percent as against 5.3 percent a year ago. The manufacturing sector recorded a growth rate of 8.4 percent during the last quarter of last fiscal, up from 4.4 percent a year ago. The services sector too witnessed marked improved during the quarter. However, agriculture and mining and quarrying sectors remained laggards in the January-March quarter. The data showed that farm output during the quarter declined by 1.4 percent as compared to a growth of 4.4 percent in the corresponding quarter of the previous fiscal. The output of mining and quarrying sector decelerated to 2.3 percent in the fourth quarter of the last fiscal as compared to a growth of 11.5 percent during the same period in 2013-14. It further said that per capita income at current prices during 2014-15 rose by 9.2 percent to Rs 87,748 as against Rs 80,388 in the previous fiscal. It was Rs 64,316 in 2011-12 and Rs 71,593 in 2012-13. Commenting on the figures, Yes Bank, chief economist, Shubhada Rao said, “The downward revision in Q3 suggests some loss of momentum began in the second half of FY2015. The GVA (gross value added), however, has a different story to tell, showing a marked sequential slowdown from Q2 onwards, implying that larger growth has come on account of net taxes on products.” She said further, “Agriculture, electricity, construction, finance and public services sectors have slowed in the last quarter. “Worries of disconnect persist. High frequency data suggests a larger slowdown in Q4 and not in Q3. We continue to rely on high frequency indicators. Challenges remain for understanding the deviations,” Rao said. The country’s manufacturing output grew by 8.4 percent in the quarter to March, but farming retreated by 1.4 percent, the data showed. Prime Minister Narendra Modi has promoted a campaign to “Make in India” and encourage labour-intensive manufacturing, but has faced opposition in rural areas where the farm economy has suffered lower prices. PTI & Reuters