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Growth rate below Modi's promise: P Chidambaram

01 Декабря 2017

"We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion", Chidambaram said in his reaction to the latest GDP figures released by the Central Statistics Organisation (CSO). Coming close on the heels of Moody's recent upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy is a shot in the arm for the Modi government, which has been fighting off charges that demonetisation and GST launch disrupted the $2.4-trillion economy. "But we can not say now whether this will mark an upward trend in the growth rate", Chidambaram added.

Official data revealed that a rise in the manufacturing sector's output pushed India's growth rate higher to 6.3 per cent during the second quarter of 2017-18 breaking a five-quarter slump. In the fourth quarter of 2013-14, economy had grown at 4.6 per cent.

Earlier in the day, Union Finance Minister Arun Jaitley hoped that the GDP will further improve in the coming quarters.

The country's economic growth recovered to more than 6 per cent in the July-September quarter, backed by strong manufacturing, allaying doubts related to disruptions caused by the goods and services tax (GST).

Releasing GDP data in New Delhi today, Chief Statistician of India T C A Anant said the GDP growth has seen a reversal trend from declining trend in the last five quarters. Analysts says that it is an indication that firms are starting to recover after being hit earlier this year by uncertainty tied to the rollout of the GST and last year's notes ban.

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Government spending slowed in the quarter, growing 4.1 per cent, as against 17.1 per cent in the June quarter. Manufacturing grew 7% while agriculture growth was 1.7%, down from 2.3% in the trailing quarter.

"Traditionally, July-September is a quarter where a lot of production takes place to cater to festive demand".

As per the data, electricity and other utilities grew by 7.6 per cent (from 7 per cent in the previous quarter) and trade, transportation and communications expanded by 9.9 per cent (from 11 per cent in the previous quarter).

"It is well accepted that investment in infrastructure is essential to growth, it increases the productivity of existing resources and crowds in private investment, which in turn creates more jobs and leads to economic well-being", he said.

Mining also posted a sharp uptick in growth to 5.5 per cent from a decline of 0.7 per cent in the previous quarter.

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Growth rate below Modi's promise: P Chidambaram