India has emerged as the fastest growing major economy in the world, registering 7.2 per cent growth in 2014-15 and 7.6 per cent in 2015-16 despite global headwinds and a truant monsoon, points out the Economic Survey for 2015-16. It envisages the Indian economy - notwithstanding the global meltdown and helped by a normal monsoon - will continue to grow by more than 7 per cent for the third year in succession in 2016-17.
Tabling the survey in Parliament on Friday, Union Finance Minister Arun Jaitley said, "Due to the Government's commitment to carry the reform process forward, conditions do exist for raising the economy's growth momentum to eight percent or more in the next couple of years."
However, the survey points out that the growth in the agriculture sector in 2015-16 continued to be lower than the average of the last decade, mainly on account of it being the second successive year with lower-than-normal monsoon rains.
The production of foodgrain and oilseeds is estimated to decline by 0.5 per cent and 4.1 per cent, respectively, while the production of fruit and vegetables is likely to increase marginally, as per information by the Department of Agriculture and Cooperation and Farmers Welfare for 2015-16.
However, a brighter picture is expected to emerge from the allied sectors - livestock products, forestry, and fisheries - with a growth exceeding 5 per cent in 2015-16, which will provide some impetus to rural incomes.
Growth in industry is estimated to have accelerated during the current year on the strength of improving manufacturing activity.
The private corporate sector, with around 69 per cent share of the manufacturing sector, is estimated to grow by 9.9 per cent at current prices in April-December 2015-16. The Index of Industrial Production (IIP) showed that manufacturing production grew by 3.1 per cent during April-December 2015-16 vis-a-vis a growth of 1.8 per cent in the corresponding period of the previous year.
The ongoing manufacturing recovery is aided by robust growth in petroleum refining, automobiles, wearing apparels, chemicals, electrical machinery and wood products including furniture. Apart from manufacturing, the other three segments of the industry sector - electricity, gas, water supply and related utilities, mining and quarrying and construction activities are witnessing a deceleration in growth.
The survey underlines that the growth in the services sector moderated slightly, but still remains robust. Being the main driver of the economy, the sector contributed about 69 per cent of the total growth during 2011-12 to 2015-16 and in the process expanding its share in the economy by four percentage points from 49 to 53 per cent.
The survey, in its outlook, clearly points out, though the emerging market economies have clearly slowed down, the Indian economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7 percent to 7.75 per cent in the coming year.