Inspite of all the challenges faced by the nation, India growing at 7.1 per cent still remains the fastest growing economy in the world.
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India’s GDP growth slowed down to 7.1% in the first quarter of current fiscal as against 7.5% in the same period of previous year and 7.9% in the quarter ended March 2016.
The key highlight of the GDP data was a visible slowdown in the fresh investment activity as reflected by the muted gross fixed capital formation (GFCF) numbers that decline by 1.1 percent at current prices in the quarter as compared with an increase of 6.8 percent in the year-ago period.
ICRA expected GDP to remain flat at 7.2% in the first quarter under the gross value added (GVA) calculation.
India’s economic growth likely lost some momentum in the April-June quarter on cutbacks in domestic and global demand, a Reuters poll showed. Indian economy grew at the slowest pace in last six quarters at 7.1%.
The sharp slowdown in growth could make it more hard for the government’s to reach its target of 8% in the year, although the country retained its claim to be the fastest-growing large economy, ahead of China.
The growth in the “agriculture, forestry and fishing”, “mining and quarrying”, and “construction” is estimated to be 1.8%, (-) 0.4%, and 1.5%, respectively in Q1 of FY2017.
One of the interesting aspect of the GDP numbers is the pick up in manufacturing activity to 9.1 per cent from 7.3 per cent a year earlier. Growth in mining and quarrying was 0.4% during April-June quarter as against the growth rate of 8.5% in the corresponding period of a year ago.
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. Government services, including defence, also logged a robust growth of 12.3 per cent, against 5.9 per cent.
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“Growth in collection of Union Excise duties, custom duties and service tax was 61 percent, 18 percent and 29 percent respectively in Q1, 2016-17 as against growth of 104 percent, 22 percent and 14 percent respectively, in Q1 2015-16”, it said.
