After recovering from twin shocks of the historic policy reforms — demonetisation in November 2016 and GST rollout on July 1, 2017 — Indian economy grew at five quarters high of 7.2 per cent in the October-December quarter, reflecting overall recovery due to good show by agriculture, manufacturing, construction and certain services.
With the current data released by the Central Statistics Office (CSO) on Wednesday, the Government, however, claimed that after a one-year gap it regained its status as the world’s fastest-growing major economy during the quarter, beating China which grew 6.8 per cent in October-December period.
The data could be a booster for Prime Minister Narendra Modi, who has been facing criticism over mounting bad loans of State-owned banks and a recent mega fraud worth over Rs 12,600 crore committed by public sector lender Punjab National Bank (PNB), the biggest in the country’s banking history.
As far as the country’s growth dynamics are concerned, the economy is expected to grow at 6.6 per cent in the current fiscal ending March 31, as per the second advanced estimates of the CSO, compared to 7.1 per cent in 2016-17, while the earlier estimate was 6.5 per cent.
The growth for July-September period has been revised upwards to 6.5 per cent, from 6.3 per cent estimated earlier by the CSO. The previous high was recorded at 7.5 per cent in the July-September quarter of 2016-17.
The CSO, however, said the real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in 2017-18 is likely to be Rs 130.04 lakh crore, as against the first revised estimate for 2016-17 of Rs 121.96 lakh crore, released on January 31.
“The growth in GDP during 2017-18 is estimated at 6.6 per cent as compared to the growth rate of 7.1 per cent in 2016-17,” it added.
Besides, the data for eight core infrastructure sectors including coal, steel, cement and petroleum, showed improved growth of 6.7 per cent for January, up from 3.4 per cent in same month a year ago.
The Finance Ministry said that the data indicate a broad-based and significant acceleration of real economic activity as projected in the Economic Survey. “Robust growth in manufacturing and significant acceleration in construction mark a turnaround in the country’s economic growth momentum,” the Ministry said in a statement.
However, the Chairman of Economic Adviser Council (EAC) to Prime Minister, Bibek Debroy, said the economy is on the right track to accelerate and the current expansion in the growth rate in a reflection of the reforms initiated by the Government. “The growth will pick up further in the upcoming quarter driven by the Government’s commitment to implement structural reforms and aided by higher growth in the industrial and services sector as well as spending by the Centre. India is on the right path to become one of the fastest major economy in the World surpassing China,” Debroy claimed.
The CSO data also said the gross valued added (GVA) for manufacturing in the quarter under review grew at 8.9 per cent higher than 6.9 per cent in the previous quarter. Similarly, the farm sector GVA grew at 4.1 per cent compared to 2.7 per cent in the previous quarter. The construction sector recorded a growth of 6.8 per cent, higher than 2.8 per cent in previous quarter. The services segment including financial services grew at rate of 6.7 per cent up from 6.4 per cent in previous quarter.
With the current growth figure, India Inc hopes that it will strengthen the position of county’s growth in near future. “The significant improvement in GDP growth, which has accelerated to a robust 7.2 per cent in the third quarter as against 6.5 per cent in the previous quarter is noteworthy and strengthens the perception that the Indian economy is at the threshold of a sustained rebound in growth,” said CII Director General Chandrajit Banerjee.