Talking to FE, NCAER economist Dr S Bhide said, “We will look at the numbers again.” The NCAER in its Review of Economy, released recently, had assumed a GDP growth rate of 5.0 per cent for 2001-02 and forecast 5.45 per cent growth rate for current fiscal.
The discrepancy in the NCAER estimates and government figures is mainly on account of the growth estimate for agriculture sector. According to Dr Bhide, “We have, based on our econometric model, assumed agriculture growth at 3.8 per cent for 2001-02.” The Central Statistics Organisation (CSO) has estimated 5.7 per cent growth in agriculture, forestry and fishing for the last year.
Dr Bhide said agriculture growth has always been difficult to estimate. “We estimate agriculture growth on the basis of monsoon and sowing pattern while the government estimates are based on various other parameters including output.”
When asked whether good agriculture performance in 2001-02 (5.7 per cent over negative growth of -0.2 per cent in 2000-01) will be followed by a robust industrial output in the current fiscal, Dr Bhide said, “Impact will only be on specific segments of the industry, especially consumer goods. Agro-based industry too will benefit.” Indirect impact, especially on overall economic growth, he added, will not be much.
Dr BB Bhattacharya of the IEG, however, sounded more positive when he said that good agriculture performance, which was likely to be repeated in the current year, should have a positive impact on the GDP growth rate in the current year. However, he added, one should look at the medium-term performance to arrive at any conclusion.
Dr Bhattacharya said that three-year growth average was 5 per cent, down from 5.5 per cent in the previous three years. Before that, medium-term growth rate was more than 6 per cent.
Looking at various other parameters, which portend well for the economy, he said, “It is possible to achieve 6 per cent GDP growth rate in the current year.” However, he added, “This will depend upon various internal and external factors, mere good monsoon will not do the trick.” Apart from easing of tensions on border, he added, growth would also depend upon the ability and willingness of the government to increase public investment as envisaged in the Union Budget. Funds should not be diverted to non-plan investments.”
Reacting to the revised GDP estimates, announced by the government on Friday, Dr Bhattacharya said this time the earlier estimates were not drastically revised. “There could be some revision, but it should not be very stark,” he said. The CSO, this time, had confirmed the GDP growth rate of 5.4 per cent for 2001-02, as was indicated in advance estimates announced in February.
The CSO estimates, however, were on the higher side, he said adding, “I would expect the GDP growth rate at around 5 to 5.2 per cent in 2001-02.”