Concerning the Government for the country’s economy, Gross Domestic Product (GDP) slowed down to 7.1 per cent in the April-June period of current fiscal, recording the lowest in last six quarters. The number came much less than earlier predicted of 7.5 per cent by the economists. The reason behind this slow down is mainly due to subdued performance of mining, construction and farm sectors.
“The GDP grew at 7.1 per cent April-June period of current fiscal and it had recorded 7.5 per cent growth in the April-June quarter of last fiscal, while 7.9 per cent in January-March quarter. The previous low was 6.6 per cent GDP growth in the October-December quarter of the 2014-15 fiscal,” said the Central Statistics Office (CSO) data which was released on Wednesday.
Besides, the growth of eight core infrastructure sectors slowed to 3.2 per cent in July compared to 5.2 per cent in June this year due subdued performance of coal, fertilisers, steel, cement and electricity segments.
Attributing the slowdown in first quarter GDP to higher subsidy outgo, Finance Ministry expressed confidence instead, saying that good monsoon and impact of pay commission award will push the economic growth close to 8 per cent in the current fiscal. “Given the good monsoon which we had this year, the 7th Pay Commission payout effect and various structural reform measures which the Government has taken we expect the growth to be higher than what we achieved last year (7.6 per cent), perhaps close to 8 per cent,” Economic Affairs Secretary Shaktikanta Das said.
According to the data, the Gross Value Added (GVA), which is estimated at the basic price, showed a growth of 7.3 per cent in the first quarter of 2016-17. The GDP growth data is calculated under the new methodology at market price, while GVA is calculated primarily at factor cost.
The GDP is GVA plus taxes on products minus subsidies on them. The economic activities which registered growth of over 7 per cent in the April-June quarter, over year-ago period, are manufacturing; electricity, gas, water supply & other utility services; trade, hotels, transport & communication and services related to broadcasting; financial, insurance, real estate and professional services and public administration, defence and other services.
The growth in agriculture; forestry and fishing; mining & quarrying and construction is estimated to be 1.8 per cent, (-) 0.4 per cent, and 1.5 per cent respectively. While, the growth in GVA at basic prices during the April-June quarter is estimated at 7.3 per cent as compared to the growth rate of 7.2 per cent a year ago. The agriculture, forestry and fishing sector has shown a growth of 1.8 per cent in its GVA during the first quarter of this fiscal as against the growth rate of 2.6 per cent in the year-ago period.
The mining growth and quarrying was 0.4 per cent during April-June quarter as against the growth rate of 8.5 per cent in the corresponding period of last year. The manufacturing sector registered 9.1 per cent growth during first quarter compared to 7.3 per cent a year ago. The construction industry is also estimated to have grown by 1.5 per cent in first quarter as against 5.6 per cent year ago. The GVA growth in services sector during first quarter is estimated at 9.6 percent as against 8.8 per cent year ago.
Also, the GVA growth in trade, hotels, transport, communication and services related to broadcasting sector in first quarter is estimated at 8.1 per cent as against 10 per cent a year ago. Public administration, defence and other services have grown at 12.3 per cent as against 5.9 per cent a year ago.
According to the statement, the growth in collection of Union Excise duties, custom duties and service tax was 61 per cent, 18 per cent and 29 per cent respectively in the first quarter of this fiscal, as against growth of 104 per cent, 22 percent and 14 per cent respectively a year ago. It also said that the major subsidies grew by 53 per cent in first quarter of this fiscal as against decline of 26 per cent a year ago.