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RBI predicts lower GDP, national income

The real national income is estimated to show a lower growth rate of 4.9 per cent in 1997-98 along with an estimated fall in real gross domestic product from 7.5 per cent in 1996-97 to 5 per cent in 1997-98, according to a study made by the Reserve Bank of India.

Based on quick estimates released by the Central Statistical Organisation, the study says the GDP fall is primarily on account of a negative growth originating from agriculture and allied activities from 7.9 per cent to a negative two per cent.

Accordingly, the study placed the per capita real national income at Rs 2,847 with a lower growth of 3.1 per cent.

Among other sectors which have experienced deceleration in their growth are manufacturing -- from 7.4 to 6.1 per cent, construction -- from 5.2 to 3.2 per cent, and service sector -- from 8.6 to 5.9 per cent. On the whole, in 1997-98, the shares of industry and services in GDP have moved up to 27 and 48.6 per cent respectively along with a decline in the share of agriculture and allied activities to 24.4 per cent.

The step-up in the rate of gross domestic saving in 1996-97 is attributable to a sharp rise in the rate of household sector savings in financial assets to 10.7 per cent of GDP from 8.6 per cent of GDP in 1995-96. The increase was primarily due to a large accretion to bank deposits.

However, there was a decline in the rates of savings of all its other components such as household sector physical saving, public sector saving and private sector saving.

In 1996-97, the rate of GDS reached an all-time high of 26.1 per cent as the rate of gross domestic capital formation adjusted for errors and omissions moved from 27.1 to 27.3 per cent.

UNI