The Indian economy is expected to grow at 7.4 per cent for the fiscal year 2014-15 ending in March, under the new methodology as Asia's third largest economy overtakes China as the fastest growing major emerging market in the world.
An advance release of real gross domestic product (GDP) for the third quarter ended December 31, 2014, shows that growth surged to 7.5 per cent over the year-ago period. It was, however, lower than 8.2 per cent growth in Q2.
The national growth estimates have got bumped up after a revision in the base year over which the growth is calculated. The change in base year to 2011-12, bringing it at par with international benchmarks, has significantly catapulted the growth estimates. Based on previous methodology, the Indian GDP growth rate was pegged at 5.3 per cent.
The government had last week said Indian economy grew by 6.9 per cent in 2013-14 as against 4.7 per cent, as calculated using the old base year,
The growth estimates for Q2 and Q3 of 2014-15, pushes India ahead of its arch rival China, which has been equally impacted by the global slowdown. China is estimated to have grown its GDP by 7.3 per cent in the last quarter of 2014, just short of India's revised estimates.
Reports from IMF and the World bank released last month had expected India to overtake China as the fastest growing economy next year.
Financial, real estate and professional services lead the way
Financial, real estate & professional services was a key driver of growth in the economy and is expected to grow 13.7 per cent for the full year 2014-15 as against 7.9 per cent last year.
While growth in agriculture is expected to slow down to 1.1 per cent as compared to 3.7 per cent last fiscal, electricity, gas, water supply and other utilities are expected to grow at double the pace at 9.6 per cent.
Manufacturing which is one of the target areas of the government under the 'Make in India' campaign is also expected to surge to 6.8 per cent as against 5.3 per cent in 2013-14.
Mining & quarrying besides trade, hotels, transport, communication and services related to broadcasting are also expected to slow down this year.
The per capita income in real terms (at 2011-12 prices) during 2014-15 is likely to attain a level of Rs 74,193 as compared to Rs. 69,959 for 2013-14. The growth rate in per capita income is estimated at 6.1 per cent during 2014-15, as against the previous year's estimate of 5.4 per cent.
The current GDP figures are certainly a good news for the government which is set to announce its first full year budget by the end of this month. According to industry analysts Make in India is expected to be one of the key areas of reforms in the present budget.
(Edited by Joby Puthuparampil Johnson)