"Despite predictions of gloom and doom, I had always maintained that the year will end with a growth rate close to 9 per cent. At the end of the year we have reported 9 per cent; but more refined estimates now place the growth rate at 9.08 per cent," Chidambaram told the Lok Sabha during the debate on the trust vote.
The revised growth estimate is on account of improved agricultural performance. Fiscal 2007-08 was a watershed year for the Indian farm sector with food grain production reaching a record of 230.67 million tonnes (mt), up 6.16 per cent over the previous year.
The first (advance) estimate of GDP growth for 2007-08, released on February 7, pegged the figure at 8.7 per cent. This number was subsequently revised to 9 per cent in the revised estimates released on May 30. The third (quick) estimate for the year will be released by the Central Statistical Organisation (CSO) on January 31, 2009, followed by a final number around a year later.
Today's announcement by Chidambaram would be the finance ministry's estimate based on their calculations on the back of better farm output, but not the official quick estimate, a CSO official said.
Chidambaram termed the current fiscal year (2008-09) as a difficult one and said growth would ease, but stay above the long-term aim of 7-8 per cent. "This government will ensure that economy will grow at 7-8 per cent compared with an average growth of 5-6 per cent when the National Democratic Alliance (NDA) was in power," he said.
India's gross domestic product (GDP) grew a record 9.6 per cent in 2006-07, the fastest economic expansion in 18 years.
Global economic woes and the sharp spike in crude oil prices have pushed the wholesale price index-based inflation to a 13-year high level of 11.91 per cent for the week ended July 5 that has led the central bank tighten monetary policy in an attempt to curb price rise and dampen inflationary expectations.
The tighter liquidity scenario and its resulting impact is seen through lower consumer spending and a decline in corporate earning margins.