NEW DELHI, February 7: Even five years after the initiation of economic reforms, it was the agriculture sector which saved the economy in 1996-97 and also covered up the poor performance of other sectors.The quick estimates of national income, consumption, saving and capital formation released by the Central Statistical Organisation (CSO) recently, has also manifested weaknesses of economic management.
Apart from agriculture, most of the sectors of the economy performed poorly in a year which witnessed the highest ever gross domestic product (GDP) growth rate of 7.5 per cent. The agriculture, forestry and fishing, taken together grew at the rate of 7.9 per cent during the year, as against the negative growth of 3 per cent in the previous fiscal.
The most worrying aspect, however, is the deceleration of the growth rate in the manufacturing sector which has even spilled over to the current financial year. The growth rate of the manufacturing sector decelerated to 7.4 per cent as compared to 14.0 per centin the previous fiscal. Out of this, registered sector output decelerated to 8.2 per cent from 14.1 per cent and that of unregistered sector to 5.8 per cent from 13.7 per cent.
The industry has not been able to overcome the phenomenon of subdued growth and now with the interest rates hardening the impact would be more telling.
According to available figures, the industrial production during April-October 1997 was up by only 5 per cent and the production in manufacturing sector grew by meager 4.7 per cent.
The worst performer during the year turned out to be mining and quarrying sector which registered a decline of 0.3 per cent. This is probably one of sectors which is going to do better in the current fiscal. The growth recorded in the April-October 1997 worked out to be 5.3 per cent.
During 1996-97, the electricity, gas and water supply, a sector dominated by public utilities, also failed to live up to the expectations. The growth rate decelerated from 7.3 per cent to 5.0 per cent during1996-97.
This appears to be a reflection on the conscious decision of the government to withdraw financial support from to public sector. It is not without reasons that the political parties have started talking about restoring budgetary support to the public sector.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
