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India GDP Growth Pegged Lower at 6.5 Percent

India GDP Growth Pegged Lower at 6.5 PercentIndia GDP Growth Pegged Lower at 6.5 Percent

The Indian economy is expected to grow at a slower 6.5% in 2017-18 compared to the 7.1% in 2016-17, the Central Statistics Office releasing the first advance estimates of GDP growth for current financial year said.

Most private economists have pared India’s growth forecast to 6.2 to 6.5% for the 2017-18 fiscal year, citing the impact of the chaotic launch of Goods and Services Tax in July on business activities, ZeeNews reported.

Reversing a five-quarter slide in GDP growth, Indian economy bounced back from a three-year low to expand by 6.3% in July-September as manufacturing revved up and businesses adjusted to the new GST tax regime.

The GDP growth in the second quarter of 2017-18 compared to 5.7% in April-June, the lowest growth rate since the Narendra Modi government took office, and 7.5% in the September quarter of the previous fiscal.

“The growth in GDP during 2017-18 is estimated at 6.5% as compared to the growth rate of 7.1% in 2016-17,” the ministry of statistics and program implementation said in its estimate of national income for 2017-18. The CSO has primarily used seven-month data to extrapolate for the full fiscal.

Gross value added was also projected to expand by 6.1% in 2017-18, slowing from 6.6% in the preceding fiscal year, according to the first advance estimates of national income for 2017-18, released by the CSO.

Within this, the GVA growth rate for ‘agriculture, forestry and fishing’ is expected to slow sharply to 2.1%, compared with the previous year’s 4.9% pace. Manufacturing sector growth has been forecast at 4.6% in 2017-18, compared with the 7.9% expansion provisionally estimated for 2016-17.

“In agriculture, what we are seeing is a base effect because last year we saw a very high growth rate that followed two years of drought,” statistics and program implementation secretary and chief statistician of India, TCA Anant, said at a press conference in New Delhi.

“In terms of production, the total production would probably be the second highest in a very long time. It is not unusual growth in agriculture in a good year. Anticipated growth of real GVA at basic prices in 2017-18 is 6.1% as against 6.6% in 2016-17.”

The data disclosed that sectors like public administration, defense and other services; trade, hotels, transport, communication and services related to broadcasting; electricity, gas, water supply and other utility services; and financial, real estate and professional services registered a growth rate of over 7%.

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