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Farm sector boosts India's 01-02 GDP growth

India said on Friday its economy grew by 5.4 per cent in the 2001-02 financial year boosted by strong farm sector growth, making it one of the world's fastest growing economies.

Data released by the Central Statistical Organisation said GDP grew 4.0 per cent in the year-ago period. The GDP growth figure for the year ending March 2002 was marginally lower than about 5.5 per cent estimated by a Reuters poll of eight economists.

In February, the government had forecast the economy of the country of more than one billion people would grow by 5.4 per cent in the year ended March 2002.

The World Bank ranks India as the world's 13th largest economy.

The agriculture sector, which holds the power to sway overall growth, expanded by 5.7 per cent in 2001-02 boosted by good monsoon rains compared with a contraction of 0.2 per cent in the year-ago period.

Two-third of the country's population depends on agriculture for its living in the world's second-most populous nation. A good harvest means better rural incomes which triggers higher demand and spending.

Financial, insurance and business services grew 7.8 per cent in 2001-02 (April-March) compared to 2.9 per cent in the previous year. Community, social and personal services grew 5.9 per cent compared to 6.0 per cent while trade, hotels transport and communications services grew 6.2 per cent compared to 5.3 per cent.

The services sector accounts for close to 50 per cent of overall growth with the rest mainly coming from farming and industry.

The only laggard was the manufacturing sector which grew 2.8 per cent in 2001-02 compared to 6.7 per cent a year ago.

The economy expanded by a cracking 6.4 per cent in the fourth quarter of 2001-02 compared with a meagre 1.5 per cent growth in the same quarter in the year-ago period.

The farm sector recorded impressive growth in the fourth quarter, zooming by 7.6 per cent compared with a fall of 4.0 per cent in the year-ago quarter while the manufacturing sector grew by 3.1 per cent compared to 4.6 per cent.

But even the impressive 5.4 per cent GDP growth for the year ended March 2002 was far below the double-digit growth analysts and policy makers say is needed to raise living standards in India where nearly a quarter of the population live in poverty.

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