New Delhi, March 31: In the run-up to the national elections, the BJP-led government today announced an unusually high GDP growth of 10.4 per cent for the third quarter of this financial year on the back of a slight sleight of hand with national statistics.
The statistical jugglery came almost as an encore to the ruling party’s ‘Vision’ document released on Tuesday which promised a double-digit GDP growth target for the nation.
While most economic pundits had forecast a 7 per cent plus GDP growth for the whole year, the Central Statistical Survey (CSO) today set GDP growth in the third quarter at above 10 per cent to keep up with its forecast of a scorching 8.1 per cent GDP growth for 2003-04.
But then the growth surge comes on the back of an earlier little-noticed move which brought down estimates for 2002-03 GDP growth just two months back from 4.3 per cent to 4 per cent.
Top finance ministry officials admitted the downward revision meant a lower base that saw GDP projections “for this fiscal, especially for the third quarter going up”.
The BJP-led government has been spending huge sums on a high-voltage multimedia campaign to project a positive image of its performance over the last five years in the run-up to the elections and much of the verbiage spins around the theme of ‘India Shining’ economically during the party’s rule since voted to power in 1999.
Its next phase of campaign is expected to build up on the good job done and focus on its promise of even better days ahead.
CSO revised 2002-03 farm growth fall at a far more severe 5.2 per cent reduction against earlier estimates of farm growth shrinkage at 3.1 per cent on the back of a severe drought.
This fresh estimate for 2002-03, announced on January 30, saw this year’s bumper crop being calculated as bringing a 9.1 per cent growth to the farm sector. With two thirds of India’s one billion-plus population dependent on agriculture for their livelihood, farming accounts for a quarter of the country’s GDP as also consumer demand.
“The new calculations mean a huge increase in GDP growth forecasts for the year. We believe it means an increase of about 0.7 per cent in growth forecasts,” said officials.
Interestingly, the World Bank had some time back calculated the Indian sub-continent’s GDP growth estimates at 5.3 per cent for calendar year 2003.
In his interim budget, finance minister Jaswant Singh spoke of a 7.5 per cent to 8 per cent GDP growth this fiscal.
The CSO estimates, despite kicking off a fresh controversy, did bring cheer to Indian stocks with the market rallying and the sensex closing up 70.16 points, with sentiment boosted by the higher growth forecast.
Financial institutions who did most of the buying in the bourses also pushed up the rupee with a surge in demand for the local currency which saw the rupee appreciating to a three-and-a half year high against the dollar. The rupee finished at 43.41/43 per dollar.
North Block officials said the third quarter GDP growth was led by a 7.4 per cent rise in the manufacturing sector, and a 16.9 per cent increase in agriculture. This is the first double-digit growth since the government started announcing quarterly numbers in 1997. Officials said, “We expect farm and manufacturing growth to remain strong in the fourth quarter.”