New Delhi: The India growth story continues riding the new economy. GDP numbers for the July to August period are out and the bull run seems to be spreading from the stock markets to industry and services.
The economy grew an annual 8 per cent in the July-September quarter, up from 6.7 per cent in the corresponding quarter of 2004-05. As a result of strong output in services and manufacturing, the economy beat forecasts, which were pegged at 7.5 per cent.
The key drivers of the upswing have been the manufacturing sector, which grew over 9 per cent and services,which grew steadily from over 8 per cent in Q1 to over 10 per cent in the second quarter.
But with the growth dropping sharply to just over 3 per cent, the power sector has been a big failure. Agriculture posted a flat growth of 2 per cent.
Economic experts say the farm sector holds the key for a sustained 10 per cent plus growth target that the PM has set for his government.
The prescription to improve its health, more private investments, diversification of crops, improved irrigation, critical to boost overall productivity.
Arvind Virmani, Director, ICREAR says there can be a balanced growth if one can do something to improve the productivity of agriculture.
"For instance, getting information to the farmers, Research and Development and extension. These systems have deteriorated tremendously over the last several decades and can be improved by innovating or by involving private sector," says Virmani.
Key policy reforms are essential in the services sector as well. This can be done by bringing FDI in retail sector as this would mean more investments and jobs.
But for the moment, India seems to be shinning, enough for the analysts to forecast year end growth at over 8 per cent.
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