GDP: Sectorwise & Quarterwise

I got this good picture [which very clearly explains the contents of GDP with percentage & respective quarters] from Financial Express.

When I came to about the GDP yesterday, I was surprised/shocked not because of GDP came down to 5.3% from 7.6% in 2nd quarter & 7.9% from 1st quarter, but because of the agriculture sector performance. Since GDP expectation from most of the economists & experts was almost broadly inline with their prediction that it will be in & around the 6% in 3rd quarter due to collapse major banks in the US, liquidity crisis, FIIs pulled out the money & etc. But surprising element was the agriculture sector which contracted the by -2.2% as compared to previous year's same quarter[For agriculture measurement I would like to go with the Year on Year (YoY) measurement because of climatic conditions repeat themselves only once in year, where as I dont believe in other things' measurement like Inflation, Manufacturing, Service & etc. For these kind of measurement I suggest there should be the Month on Month (MoM) measurement because these are short term as compared to agriculture & are very rapid in nature as compared to the crops of the agriculture]. I dont know how the government is going to justify the agriculture numbers. Being 60% of the population working in this field & still producing the lesser outputs as compared to previous years [with normal monsoon] is ridiculous. One side country's population is increasing [only relief factor is rate of birth generation has come down compared to previous decades of Independent India] & our agriculture productivity is decreasing.

And manufacturing sector numbers were in line with expectations only with little bit more aggressively down. This because of tight liquidity policy, slowdown in the world economy, massive scale of layoffs/salary cuts, consumer behavior spending pattern in time of recession & etc... This sector has nothing else but to wait for the revival in the business cycle in the world economy in the "GLOBALIZED & COUPLED WORLD"

Where as if you see the Service & Industry both did quite well, in fact Service sector did much better than that of 2nd quarter.

Now if we calculate the first 9 month GDP it will come to 6.93% [(7.9+7.6+5.3)/3] & to achieve the earlier predicted target of 7.1% we need to have 7.7% [(7.1*4)- (7.9+7.6+5.3)in the 4th quarter. That is quite optimistic figure looking at present conditions. Going by present economic conditions India's GDP growth for fiscal year 2008-09 may be 6.5% to 6.7%.

Now there is lot of pressure amounts on governor of RBI to reduce the interest rates. As government has already come up with the 3 stimulus packages & running with higher fiscal deficit & dont have time & authority to plan & implement the full fledged plans, RBI left with no other option but to force the banks to lend try to push the economic activities in the country.