ar and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went

India Story Just Got Better

Within a week (31 Dec.-7 Jan), the UPA Government has revised the GDP growth estimates for both, the previous fiscal as well as for the current year. The FY04 estimate was raised from an already impressive 8.2% to an even better 8.5%, and the forecast for FY05 was raised from 6-6.5% to 6.9%. The improved performance for the previous fiscal is not surprising, as it was on a low base, and a bumper harvest. But, to have an economy grow at nearly 7% on an extremely high base is just superb. What makes the upward revision in the current fiscal’s growth projection even better is that the farm output this year will be much lower than last year’s production. Agriculture growth this year will shrink to a negligible 1.1% versus a solid 9.6% in the previous fiscal. Still, the overall impact on the economy will be much lower, thanks largely to the robustness in industrial and services sectors. This is quite a departure from the past, when a significant drop in farm output invariably led to an equally big decline in the manufacturing growth in that year and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went

the forecast for FY05 was raised from 6-6.5% to 6.9%. The improved performance for the previous fiscal is not surprising, as it was on a low base, and a bumper harvest. But, to have an economy grow at nearly 7% on an extremely high base is just superb. What makes the upward revision in the current fiscal’s growth projection even better is that the farm output this year will be much lower than last year’s production. Agriculture growth this year will shrink to a negligible 1.1% versus a solid 9.6% in the previous fiscal. Still, the overall impact on the economy will be much lower, thanks largely to the robustness in industrial and services sectors. This is quite a departure from the past, when a significant drop in farm output invariably led to an equally big decline in the manufacturing growth in that year and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went

ard revision in the current fiscal’s growth projection even better is that the farm output this year will be much lower than last year’s production. Agriculture growth this year will shrink to a negligible 1.1% versus a solid 9.6% in the previous fiscal. Still, the overall impact on the economy will be much lower, thanks largely to the robustness in industrial and services sectors. This is quite a departure from the past, when a significant drop in farm output invariably led to an equally big decline in the manufacturing growth in that year and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went

l impact on the economy will be much lower, thanks largely to the robustness in industrial and services sectors. This is quite a departure from the past, when a significant drop in farm output invariably led to an equally big decline in the manufacturing growth in that year and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went

ar and in the following one. In the decades before the 1990s, total GDP would actually fall on account of poor agricultural growth. That this negative trend has been reversed is definitely a welcome sign for the Indian economy.

The last time the Indian economy went through such a purple patch was in the investment-led boom of the mid-1990s. The latest data too suggests that the ongoing buoyancy in the Indian economy is driven by greater investment. One statistic that puts this in perspective is the growth in the manufacturing sector. It is projected to expand by 8.9% in the year 2004-05, as against a healthy growth of 6.9% in the previous year. Between April-November 2004-05, the Index of Industrial Production (IIP) grew by 8.4% compared with 6.4% in the year-ago period. In October, it grew by as much as 10%. Manufacturing was up a whopping 11.3% in October. Whatever slowdown is being witnessed in the IIP is due to lower growth in mining and construction dependent on agriculture, whose fortunes are still tied with the southwest monsoon. The Indian economy has become considerably resilient, and can sustain a growth rate of at least 7% without much help from the rain gods

Another side of the Indian economy that looks to be on a roll is the services industry. It now accounts for over 50% of the GDP, and has emerged as the major