Good news for the recovery of the Indian economy
New Delhi (AsiaNews) - According to the latest data issued by the government the Indian economy has grown from 5.3 last December to 6.1 in June 2009. The Deputy Chairman of the Planning Commission, Montek Singh, commenting the latest figures said: “The worst may be over and we expect to see improved performance in subsequent quarters”.
The government’s stimulus measures for the economy have helped to create demand. The share of consumer spending in the economy shrunk to 55.6% in April-June from 58% a year ago, while the government’s share rose to 9.9% from 9.6% on the back of stimulus spending.
Whilst in 2008 the growth index was at 7.8 it fell at 5.3 in the worst month of the crisis and now is slowly moving up to 6.1. With the recovery shown in the last two quarters from 5.3 to 6.1, India remains the second-fasted growing major economy after China, which has an almost 8% growth rate.
The doubt on the stability of this growth rate is cast by the poor ongoing monsoon, which could severely affect agriculture and mostly the energetic field.
Electricity generation and mining output were the best performers as they grew 6.2% and 7.9% respectively in the first quarter of this fiscal year against 2.7 and 4.6 a year ago.
The worst-hit sector were trade, hotels, transport and communication. Together these sectors posted 8.1% growth in the first quarter of this fiscal compared to 13% a year ago.
Giving his opinion on the matter the prime minister, Manmohan Singh, while addressing the plan panel on Tuesday said: “We have been through a difficult year because of the global economic downturn, which is only now coming to an end with a slow return to normalcy in the months that lie ahead. The country has also seen a poor monsoon”. He cautioned that despite a slight rise in growth, the road to recovery was a long haul.
He also pointed out that rational energy policies were critical: “This is a new compulsion. We need to asses whether we are on track in critical aspects of or energy policy. Energy is vital to our economic growth. This is an area where we are a deficit economy. We import over 70% of our petroleum energy needs an we are also moving to a deficit position in coal”.
The poor performance of the monsoon may slow down the growth by one or two points.