Despite a decline in the index of industrial production (IIP) in mining, manufacturing and electricity, which registered lower growth rates in the second quarter (June-September) of 2005 than in the same period in 2004, the overall growth of the economy this quarter has been estimated at 8.1 per cent, raising expectations of 7.5 per cent GDP growth for the entire year.

So what led the growth this quarter? The sectors which registered significant growth in Q2 of 2005-06 over Q2 of 2004-05 are trade, hotels, transport and communication at 12.0 per cent, financing, insurance, real estate and business services at 9.9 per cent, manufacturing at 9.2 per cent, construction at 7.4 per cent, and community, social and personal services at 6.7 per cent.

The Central Statistical Organisation (CSO) in the ministry of statistics and programme implementation has released the quarterly estimates of gross domestic product for July-September (Q2) of 2005-06, both at constant (1993-94) and current prices.

Estimates of GDP for Q2 of 2005-06, at factor cost at a constant of the 1993-94 prices, is Rs3,76,878 crore, as against Rs3,48,867 crore in Q2 of 2004-05, showing a growth rate of 7.5 per cent over the corresponding quarter of previous year.

According to the latest estimates available on the index of industrial production (IIP), the index of mining, manufacturing and electricity registered growth rates of (-) 1.7 per cent, 8.6 per cent, and 2.1 per cent, respectively during Q2 of 2005-06, as compared to the growth rates of 4.6 per cent, 9.3 per cent, and 9.6 per cent in these sectors during Q2 of 2004-05. The key indicators of construction sector, namely, cement and steel registered growth rates of 8.8 per cent and 5.9 per cent, respectively during Q2 of 2005-06.

The growth rate in agriculture, forestry and fishing at 2.0 per cent, mining and quarrying sector at (-) 1.1 per cent, and electricity, gas and water supply sector at 3.3 per cent, registered growth rates of less than 5.0 per cent in Q2 of 2005-06.

According to information from the department of agriculture and co operation (DAC) on the likely production of crops during the 2005-06 Kharif season, which has been used in compiling the estimates of the contribution to GDP from agriculture for this quarter, the production of rice, coarse cereals, and pulses is likely to register growth rates of 3.0 per cent, (-)1.0 per cent, and 0.6 per cent, respectively during this Kharif season over the corresponding Kharif season in 2004.

Among the commercial crops, production of oilseeds is expected to decline by 2.5 per cent during the Kharif season of 2005-06. While production of cotton is expected to decrease by 6.5 per cent, that of sugarcane is expected to increase by 10.9 per cent, during 2005-06 over their estimated production in the previous year.

Among the services sectors, the key indicators of railways – the net tonne kilometers and passenger kilometers have shown growth rates of 2.2 per cent and 6.7 per cent, respectively. The other key indicators, namely, production of commercial vehicles, cargo handling at major ports and civil aviation, passengers handling by the civil aviation sector, total stock of telephones including WLL and cellular phones, aggregate bank deposits, bank credits and total revenue expenditure (excluding interest payments) of central government, respectively have shown growth rates of 20.9 per cent, 13.6 per cent, 19.5 per cent, 19.2 per cent, 31.2 per cent, 19.2 per cent, 34.6 per cent and 27.9 per cent, during Q2 of 2005-06 over Q2 of 2004-05.

GDP at factor cost at current prices in Q2 of 2005-06 is estimated at Rs7,23,657 crore, as against Rs6,49,163 crore in July-September 2004-05 – rise of 11.5 per cent.

The wholesale price index (WPI) of the groups food articles, fish, minerals, manufactured products, electricity, and all commodities, has risen by 4.4 per cent, 12.9 per cent, 7.6 per cent, 2.5 per cent, 6.2 per cent and 3.9 per cent, respectively. The consumer price index for industrial workers (CPI-IW) has shown a rise of 3.7 per cent during Q2 of 2005-06 over Q2 of 2004-05.