The Economic Survey (2015-16) presented in Parliament by union finance minister Arun Jaitley emphasises that Indian economy will continue to grow more than 7 per cent for the third year in succession in 2016-17, helped by a normal monsoon, despite global meltdown.
The Survey, which bases the estimates partly on the government's commitment to carry the reform process forward, says conditions do exist for raising the economy's growth momentum to 8 per cent or more in the next couple of years.
The survey underlines that despite global headwinds and a truant monsoon, India recorded 7.2 per cent growth in 2014-15 and 7.6 per cent in 2015-16, thus becoming the fastest growing major economy in the world.
The Survey says that GDP growth would have been higher bur for the agriculture sector, which continued to be lower than the average of last decade in 2015-16, mainly on account of a second successive year of lower-than-normal monsoon rains.
Production of foodgrains and oilseeds is estimated to decline by 0.5 per cent and 4.1 per cent, respectively, while the production of fruits and vegetables is likely to increase marginally. A brighter picture is expected to emerge from the allied sectors consisting of livestock products, forestry and fisheries with a growth exceeding 5 per cent in 2015-16, which will provide some impetus to rural incomes, the Survey finds.
Growth in industry is estimated to have accelerated during the current year on the strength of improving manufacturing activity. Private corporate sector, with around 69 per cent share of the manufacturing sector, is estimated to grow by 9.9 per cent at current prices in April-December 2015-16.
The index of industrial production (IIP) showed that manufacturing production grew by 3.1 per cent during April-December 2015-16, vis-à-vis a growth of 1.8 per cent in the corresponding period of the previous year. The ongoing manufacturing recovery is aided by robust growth in petroleum refining, automobiles, wearing apparels, chemicals, electrical machinery and wood products including furniture.
Apart from manufacturing, the other three segments of the industry sector - electricity, gas, water supply and related utilities, mining and quarrying and construction activities - are witnessing a deceleration in growth.
The Survey underlines that the growth in the service sector moderated slightly, but still remains robust.
Being the main driver of the economy, the sector contributed about 69 per cent of the total growth during 2011-12 to 2015-16 and in the process expanding its share in the economy by 4 percentage points from 49 to 53 per cent.
The Survey in its outlook clearly points out that though the emerging market economies have clearly slowed down, the Indian economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7.0 per cent to 7.75 per cent in the coming year.