Latest GDP numbers indicate a growth of 5.5% in Q1 of 2012-13. This growth rate is slightly higher than the 5.3% growth registered in Q4 of FY12, a consecutive decline for five quarters.
Table 1: Trend GDP growth rates in India (%)
| Industry |
2011-12 |
2012-13 | |||
| Q1 | Q2 | Q3 | Q4 | Q1 | |
| Agriculture | 3.7 | 3.1 | 2.8 | 1.7 | 2.9 |
| Industry | 5.6 | 3.7 | 2.5 | 1.9 | 3.6 |
| Mining & quarrying | -0.2 | -5.4 | -2.8 | 4.3 | 0.1 |
| Manufacturing | 7.3 | 2.9 | 0.6 | -0.3 | 0.2 |
| Electricity, gas & water supply | 7.9 | 9.8 | 9.0 | 4.9 | 6.3 |
| Construction | 3.5 | 6.3 | 6.6 | 4.8 | 10.9 |
| Services | 10.2 | 8.8 | 8.9 | 7.9 | 6.9 |
| Trade, hotels, transport & communication | 13.8 | 9.5 | 10.0 | 7.0 | 4.0 |
| Financing, insurance, real estate & business services | 9.4 | 9.9 | 9.1 | 10.0 | 10.8 |
| Community, social & personal services | 3.2 | 6.1 | 6.4 | 7.1 | 7.9 |
| GDP at factor cost | 8.0 | 6.7 | 6.1 | 5.3 | 5.5 |
Source: CSO & FICCI Research
Agriculture expanded by 2.9% (vis-à-vis 3.7% of Q1 FY 12 and 1.7% of Q4 FY 12). This growth in agriculture vis-à-vis last quarter is a pleasant surprise. However, in spite of the agricultural sector clocking close to 3% growth
- Prices of vegetables and food grains would remain elevated owing to the ripple effect of the lower productivity in the months of June & July due to deficient monsoon
- Fertilizer sales during the first quarter of FY13 indicate a decline
- Area sown for all major crops witnessed a decline between the years 2011 and 2012 (in the first 4 months)
The industry sector recorded a growth of 3.6%, which is substantially higher than the 1.9%, & 2.5% growth recorded in Q4 & Q3 FY12 respectively. However, this figure is not in line with the growth figures achieved in FY 10 & FY 11. The growth in the mining & quarrying sector has been a meager 0.1% as compared to 4.3% in the last quarter. The trend in FY12 has been negative with the numbers drastically going up in the fourth quarter. However, it seems that the negative trend has once again caught up with this sector.
The performance of the manufacturing sector was also far from being buoyant. The manufacturing sector reported a growth of 0.2% in Q1FY13, vis-à-vis (-) 0.3% growth in Q4 FY12.
The construction sector recorded a whopping growth of 10.9% in the first quarter as compared to 4.8% in Q4 FY 12. The sector has not recorded such a high growth ever since Q2 FY08. This year’s good performance could be due to delayed monsoon which otherwise affects construction activity. Cement dispatch numbers for the quarter have been fairly decent and may be the delay in the monsoons this year has lent some support to the cement companies.
However, the worrying point was the growth rate in service sector at a low of 6.9% as compared to 10.2% in Q1 FY 12. At a disaggregated level, it was the trade, hotels & restaurants sector which dragged the services growth down. The trade, hotels & restaurants sector recorded an all-time low growth of 4% in Q1FY13 as compared to 7% in the last quarter and close to 14% in Q1 FY 12.
On the expenditure side,
- The private final consumption expenditure recorded a growth of 4.0% in Q1FY13, which is the lowest since 2005-06
- Gross fixed capital formation also registered a growth of just 0.7% in Q1 of FY13, vis-à-vis 3.6% growth in Q4 FY12 and 14.7% growth in Q1 FY12.
Table 2: Trend GDP growth by expenditure method, India (%)
|
2011-12 |
2012-13 |
||||
| Industry | Q1 | Q2 | Q3 | Q4 | Q1 |
| Private final consumption expenditure | 4.9 | 4.6 | 6.4 | 6.1 | 4.0 |
| Government final consumption expenditure | 4.9 | 7.2 | 4.7 | 4.1 | 9.0 |
| Gross fixed capital formation | 14.7 | 5.0 | -0.3 | 3.6 | 0.7 |
| Exports of goods and services | 18.0 | 19.7 | 6.1 | 18.1 | 10.1 |
| Imports of goods and services | 19.3 | 27.0 | 27.0 | 2.0 | 7.9 |
Image Source : c_ambler, Flickr
