INDIA’S GROWTH

INDIA ACHIEVES HIGH GDP GROWTH AFTER GLOBAL CRISIS, INFLATION WORRIES: RBI

Siddharthan Meganathan

International Business Times, August 25, 2010

The Indian economy exhibited broad based recovery in the second half of 2009-10 from the slowdown that had started in the second half of 2008-09. Despite deficient monsoon and the fragile global recovery, India achieved 7.4 percent growth in GDP in 2009-10, one of the highest in the world. The focus of macroeconomic policies was on management of the recovery, according to the latest annual report of the Reserve Bank of India (RBI).

A strong recovery in industrial sector combined with a resilient services sector muted the impact of a deficient South-West monsoon on overall output. The contribution of the industrial sector to the overall growth increased sharply from 9.5 percent in 2008-09 to 28 percent in 2009-10.

The services sector witnessed growth moderation from 9.3 percent in 2008-09 to 8.3 percent in 2009-10, essentially due to the “community, social and personal services” on partial withdrawal of fiscal stimulus and the base effect attributed to large disbursements of arrears under the Sixth Pay Commission award in 2008-09.

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