Showing the growth pace as the fastest growing major economy in the world, Indian economy grew 7.7 per cent in January-March 2018, the biggest expansion in seven quarters. The robust figures came on account of good shows in manufacturing, construction and service sectors as well as good farm output, according to the Government data showed on Thursday.
India surpassed China's growth of 6.8 per cent in the January to March quarter. However, the economic growth slows to 6.7 per cent in 2017-18 compared to 7.1 per cent in 2016-17. “The GDP at 2011-12 prices in the fourth quarter of 2017-18 registered growth rate of 7.7 per cent as against 5.6 per cent, 6.3 per cent and 7 per cent, respectively, in the first three quarters of 2017-18. Rapid growth in agriculture (4.5 per cent), manufacturing (9.1 per cent) and construction (11.5 per cent) contributed to the overall growth,” the Central Statistics Office (CSO) said in its national accounts data.
However, the previous high GDP growth of 8.1 per cent was recorded in April-June quarter of 2016-17. The GDP growth was 6.1 per cent in January-March quarter in 2016-17. Earlier in the day, amid optimism ahead of GDP data, BSE benchmark Sensex vaulted over 416 points while the broader NSE Nifty cruised past the 10,700-mark today as investors snapped up banking, financial and energy counters.
With the GDP figures, India Inc also feels that the country's economy is back on track.
“The significant expansion in GDP print, which has sprung a positive surprise by notching up an impressive growth of 7.7 per cent in the fourth quarter as against 7.0 per cent in the third quarter of FY18 powered by a broad-based upturn in farm output, improved manufacturing performance and a vibrant services sector,” said Chandrajit Banerjee, Director General, CII. “The rebound in growth reinforces CII's own assessment that the economy is back on track and is set for a strong recovery after the period of disruptions sparked by demonetization and GST implementation. The GDP numbers for 2017-18 marginally overshoots the advance estimates of GDP released earlier this year,” added Banerjee.
Finance Minister Piyush Goyal also said the 7.7 per cent GDP growth in the fourth quarter of 2017-18 showed the economy was on right track for higher growth in the future. The growth surpassed China's 6.8 per cent expansion in the January-March period. “GDP growth has been increasing continuously every quarter with growth of 7.7% in Q4 of 2017-18. Shows that the economy is on the right track & set for even higher growth in the future. This is the #SahiVikas under leadership of PM,” Goyal tweeted.
Speaking to reporters soon after GDP data for Q4 and 2017-18 was released, Economic Affairs Secretary Subhash Chandra Garg said the government is not cutting its FY19 growth forecast of 7.5 per cent. In 2017-18, the economy had grown by 6.7 per cent. He said he did not see any co-relation between oil prices and GDP growth and the fiscal deficit would remain as per the targets.
Banerjee further stated that, the figures show that the rally in investment demand is continuing apace as gross fixed capital formation rose by 9.2 per cent in 4QFY18 as against 4.8 per cent per cent achieved in 3QFY18 which is noteworthy. “It seems that industrial capex is gradually beginning to bounce back and we can expect fresh investments as well as capacity creation in FY19 as the demand cycle improves further based on tailwinds created by factors such as prognosis of a good monsoon, increased government spending and favourable global growth. Moreover, a slew of game-changing reforms such as GST, bankrupcy code, and steps to improve ease of doing business would strengthen the growth drivers, going forward,” he added.