BUDGET - BMR Advisors

ECONOMIC INDICATORS AT A GLANCEIndia has embarked on an ambitious growth trajectory. Afterdemonstrating strong GDP growth figures for preceding fouryears, albeit with some moderation, this year too, the Indianeconomy has exhibited buoyant growth numbers. The GDPgrowth for first half of financial year (FY) 2007-08 (April-September) is estimated at 9.1 percent as compared with 9.9percent in the corresponding period of the previous year. The fullyear growth has been estimated at 8.7 percent.Increased economic activity has been witnessed across sectors.While agriculture and allied activities have recorded highergrowth this year, the growth in industrial and services sector hasbeen lower compared to the previous year. Agriculture sectorhas recorded a higher growth rate of 3.7 percent for FY 2007-08(April-September) as compared to 2.8 percent for thecorresponding period of the previous year. Industry recorded agrowth rate of 9.5 percent (11.0 percent for the previous year)and services sector recorded a growth rate of 10.5 percent (11.6percent for the previous year).Growth in the index of industrial production (IIP) moderated to9.2 percent during FY 2007-08 (April-November) against10.9 percent for the corresponding period of the previous year.Although, moderation has been witnessed in most of themanufacturing industry groups, there has been a sustained highgrowth in the capital goods sector which has primarily beendriven by capital expenditure undertaken by manufacturing firmsto augment production capacities.Infrastructure sector performanceIn the backdrop of developments during the H1 FY 2007-08, thesix core infrastructure industries, comprising 26.7 percent of theIIP, posted a lower growth of 6 percent during FY 2007 08 (April-November) as compared to 8.9 percent for the correspondingperiod of the previous year. When compared to previous yeargrowth rate, sluggishness has been observed in the coresectors. This sluggishness is primarily attributable to high baseeffect, under utilization of capacity in a few sectors owing toindustry specific constraint.indiaBUDGET20085