Farm growth down to 1.7% from 2.3% in previous quarter while manufacturing and construction see growth of 7% and 2.6% respectively.
New Delhi: India’s GDP growth rate for the July-September quarter rebounded to 6.3 per cent as opposed to 5.7 per cent in the previous quarter, indicating that the economy is slowly recovering from the twin effects of demonetisation and the introduction of the Goods and Services Tax (GST).
The 5.7 per cent growth in the April-June quarter was the lowest in 12 quarters.
While growth in the agriculture sector has contracted to 1.7 per cent from 2.3 per cent recorded in the first quarter, manufacturing grew 7 per cent from 1.2 per cent in the previous quarter, according to the Central Statistical Organisation.
Construction grew 2.6 per cent and financial, real estate and professional services recorded a growth of 5.7 per cent.
Similarly, mining has posted a growth of 5.5 per cent, reversing its negative growth.
The latest growth in the economy breaks the five-quarter downward trend that began in Q1 of FY 17.
Analysts had expected that the Q2 GDP numbers would reflect the receding of the twin effects of demonetisation and GST to some extent. Moreover, the restocking before the festive season plus an increase in sales of two-wheelers, commercial vehicles, diesel consumption, rail freight and electricity generation were also expected to contribute to growth.
The first quarter was marred by the continuing after-effects of demonetisation and the destocking that happened due to the implementation of GST.
The stock markets, however, reacted negatively to news of India’s fiscal deficit touching 96.1 per cent of the budgetary target for this fiscal year. The Sensex closed 453 points or 1 per cent lower Thursday while the Nifty closed 134 points or 1.3 per cent lower.
Growth of Gross Value Added (GVA) — the measure of value of goods and services in an economy — accelerated by 6.1 per cent in the second quarter of FY18 while it was 6.8 per cent in Q2 of FY17.
Subrata Panda is an intern at ThePrint.
No doubt, 6.3 percent is quite low. But if we think of future, GST will definitely boost the GDP of our country. Singapore is the ebst example, where when they implemented GSt the economy went down and then it started to gain progress. And today, we all know where Singapore is standing. So, hope good, everything will go fine.