Releasing the advance estimates of national income prepared by the Central Statistical Organisation (CSO) based on the 1993-94 prices here on Tuesday, minister of state for planning and programme implementation Ram Naik said better Gross Domestic Product (GDP) growth in the current fiscal, "is due to high growth in agriculture, manufacturing as well as personal, social and community services."

In absolute terms, the GDP for the current fiscal is estimated at the level of Rs 11,09,983 crore at 1993-94. The GDP for previous fiscal has been estimated at Rs 10,49,191 crore.

The Net National Product (NNP) was estimated at Rs 9,79,573 crore for the current fiscal as compared with Rs 9,26,420 crore in 1997-98. With this, the national income will register a growth of 5.7 per cent as compared with 4.8 per cent in the previous fiscal.

Theper capita income at 1993-94 prices is estimated to be Rs 10,047 as compared with Rs 9,660 as per for the previous year.

The most important sector-manufacturing-is likely to achieve lesser growth of 5.7 per cent as compared with 6.8 per cent during 1997-98.

The growth for electricity, gas and water supply is likely to be a shade lower at 6.3 per cent as against the earlier released quick estimates which had put the growth at 6.6 per cent for the previous fiscal.

Mining and quarrying is likely to show a substantial deceleration in growth rate to 0.1 per cent from the previous year's growth rate of 2.7 per cent. A major turnaround has been estimated for the agriculture, forestry and fishing group which is estimated to achieve a growth of 5.3 per cent at 1993-94 prices as compared with the previous year's negative growth in the sector which stood at (-) 1.0 per cent.

In volume terms, the CSO has said that the production of food grains during the current fiscal is likely to grow by 1.5 per cent andachieve 195.25 million tonnes as compared with 192.43 million tonnes in the previous fiscal. This estimate is based on the information furnished by the Department of Agriculture and Cooperation, the minister said.

Production of rice and coarse cereals is expected to decline by 0.1 per cent and 6.6 per cent respectively during the current fiscal. In the service industry, trade, transport and communications sectors are estimated to grow at 6.8 per cent as compared with the previous year's growth rate of 5.7 per cent.

The growth in this sector would mainly be on account of increase of the GDP of trade sector which is estimated on the basis of volume of goods transacted. At the same time, financing, insurance, real estate and business services is estimated to show a deceleration in the growth rate to 7.7 per cent in the current fiscal as compared with 8.4 per cent in the previous fiscal. This is estimated to come about mainly due to the higher rate of inflation in terms of wholesale price index in thecurrent fiscal as compared with that of the last financial year. The lesser growth rate anticipated in the area of community, social and personal services sector is mainly due to higher wages in drawn by government employees during the previous fiscal.

INSIGHT

Fiscal deficit to overshoot target
The estimated GDP growth is better than what has been generally expected, and is an improvement over the growth of last year. The estimates have been worked on the new base year, 1993-94, which replaces the old base of 1980-81. The updating has helped improve the industrial growth rate. Higher weights have been assigned to fast-growing industries and new industries that have come up after 1980-81. The weights to slow-growing and sunset industries have been correspondingly pared. (Weights are likely to be shuffled again following the completion of the National Sample Survey this year). By itself, the shift in the base year for measuring real GDP growth rate, measured at 1993-94 prices, will notdisproportionately boost the nominal GDP, measured at current (1998-99) prices. To the extent inflation, though modest this year, has been higher than in the previous year, nominal GDP for 1998-99 will bloat. This will provide little solace to the finance minister if the fiscal deficit soars higher than prices. The fiscal deficit is slated to over-shoot the budget target. The latest estimate of agricultural growth appears to be on the high side, but this is because agricultural production recorded a decline in 1997-98.