06. Sustained manufacturing activity and impressive performance of the services sector with reasonable support from the recovery in agricultural activity have added greater momentum to this growth process. After recording some slowdown in the third quarter (October-December) of 2005-06, real gross domestic product (GDP) registered a sharp increase in the fourth quarter (January-March) of 2005-06 benefiting from a pick-up in almost all segments of agriculture, industry and services. According to the revised estimates released by the Central Statistical Organization (CSO) in May 2006, real GDP accelerated from 7.5 per cent in 2004-05 to 8.4 per cent during 2005-06. The Indian economy has, thus, recorded an average growth of over 8 per cent in the latest three years (2003-04 to 2005-06).
Thekharif crops coverage up to July 10, 2006 increased by around 11.9 per cent over a year ago. For all crops taken together, around 27 per cent of the normal area has been sown so far. Total foodgrains production during 2005-06 was placed at around 208 million tonne, an increase of 5 per cent over the previous year, mainly on the back of higher output of rice. The increase in the production of non-foodgrains crops was led mainly by sugarcane and cotton.
Industrial production continued to grow at 9.8 per cent during Q1 in 2006-07 The manufacturing sector with double digit growth (10.9 per cent) continued to be the key driver of industrial activity, contributing almost 92.5 per cent of the growth in industry. Electricity and mining sectors, however, continued to exhibit subdued growth.
The robust performance of the manufacturing sector was largely led by \u2018chemical and chemical products\u2019, \u2018machinery and equipments\u2019, \u2018basic metal and alloy industries\u2019, \u2018transport equipment and parts\u2019, and \u2018non- metallic mineral products\u2019. The manufacturing sector growth at 10.9 per cent during Q1 of 2006-07 was the highest for this period in the last ten years.
According to the use-based classification, the capital goods sector registered an impressive growth of 21.1 per cent during Q! of fiscal 2006-07 even on a high base, reflecting strong investment demand. This is the highest growth for April-May period under the new base (1993-94=100). Higher production of laboratory and scientific instruments, broad gauge passenger carriage, boilers, complete tractors, industrial machinery and textile machinery boosted capital goods production. Basic goods sector was buoyed up by growth in cement sector, carbon steel and other minerals. Intermediate goods sector, after recording subdued growth during most of 2005-06, witnessed moderate improvement, facilitated by higher production of viscose staple fibre, filament yarn, cotton yarn, paints, enamels and varnishes, and PVC pipes and tubes. Consumer goods, both durable and non-durable segments, on the other hand, recorded some deceleration, partly on account of base effect.
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