Comparing China's growth, Finance Minister Arun Jaitley on Friday said the economy is in a recovery mode and GDP data has showed us about the upward trend of Indian economy. "The fourth quarter GDP data "gives us a broad idea of how the Indian economy is moving. It is absolutely clear that the economy is in a recovery mode," Finance Minister Arun Jaitley on Friday told the reporters here.
"While the fourth quarter GDP growth rate at 7.5 per cent was better than China's 7.4 per cent, making India the fastest growing economy in the world, for the full fiscal it was a tad lower than the Chinese growth rate," he added.
Dismissing former Prime Minister Manmohan Singh's comments on the state of Indian economy, Finance Minister Arun Jaitley on Friday said an economy growing at fastest pace in the world cannot be 'fragile'. "In a global slowdown situation, to have the fastest growth rate in the world certainly does not make Indian economy fragile," he said.
The Finance Minister said the fourth quarter (January- March) GDP growth of 7.5 per cent and 7.3 per cent for the entire financial year 2014-15 indicate that the economy is in 'recovery mode'. "In my opinion, the full year growth numbers reflect that the economy is not at its full potential. Manufacturing and services sector indicate that we have a potential to grow at 8-9 per cent and even more than that," Jaitley said, adding that agriculture and exports are the weaklings and if they show improvement the overall economic growth will be lot better.
The silver lining in the GDP number is the manufacturing sector which registered 8.4 per cent growth in the fourth quarter and 7.1 per cent for entire 2014-15. "Manufacturing and services indicate that we have a potential to grow at 8-9 per cent and beyond," Jaitley said.
Commenting on the GDP numbers, Finance Secretary Rajiv Mehrishi also said the improvement in manufacturing sector growth shows that jobs are being created.
Jaitley further said that with improvement in agriculture and exports, India could achieve 9 per cent growth rate. "The services sector is moving towards a double digit growth rate while there is an upward movement in the manufacturing sector. "Therefore, it holds a good promise for 'Make in India' programme."
There is some improvement in capital formation and revenue collections, he said, adding they indicate that the Indian economy has a potential to realise its own strength. The minister said 7 per cent plus manufacturing growth sends signals of economic revival.
Blaming on poor monsoon for lower agriculture growth rate of 0.2 per cent in 2014-15, he said, "The global slowdown, however, has had its impact on Indian exports. "If global situation improves, Indian exports will automatically improve," he said, adding that if agriculture and exports improve India will be able to achieve its short term growth target of 9 per cent and beyond.
Meanwhile, India Inc also said the economy is showing signs of recovery but called for drastic reforms at the ground level to improve investors' sentiment and sought serious attempts to revive growth in agriculture sector.
"The growth of agriculture sector should be seriously looked at as there is a significant decline, PHD Chamber President Alok B Shriram said in a statement. "Though there is an uptick in GDP growth, lots need to be done at the ground level for the physical effects of reforms undertaken during the recent times."