Farm pushes GDP growth to 7.7%

Robust performance by manufacturing, construction and service sectors and good farm output pushed the India’s January-March 2018 GDP growth to a seven-quarter high of 7.7%, helping it retain the fastest growing major economy tag, government data showed on Thursday.

India’s economic expansion at 7.7% was significantly higher than China’s 6.8% in the January-March period. However on yearly basis, the Indian economy grew at a four-year low of 6.7% in 2017-18, down from 7.1% in the previous fiscal. The previous low was recorded in 2013-14 at 6.4%.

“GDP at 2011-12 prices in the fourth quarter of 2017-18 registered growth rate of 7.7% as against 5.6%, 6.3% and 7%, respectively, in the first three quarters of 2017-18. Rapid growth in agriculture (4.5%), manufacturing (9.1%) and construction (11.5%) contributed to the overall growth,” the Central Statistics Office (CSO) said in its national accounts data released on Thursday.

The previous high GDP growth of 8.1% was recorded in the April-June quarter of 2016-17. The GDP growth was 6.1% in January-March 2016-17.

Finance Secretary Hasmukh Adhia said, “The constant increasing trend of quarterly GDP numbers in the four quarters of 2017-18 at 5.6%, 6.3%, 7% and 7.7% indicates that the structural measures of reforms undertaken by government is now bringing rich dividends in the form of higher GDP growth rate.”

The decline in the annual GDP growth has been mainly due to dip in manufacturing, agriculture and mining activities. However, construction and financial services showed some improvements.

The gross value addition for the January-March quarter expanded at 7.6% from from 6% a year ago, data showed. Manufacturing sector GVA grew at 9.1% in fourth quarter, up from 6.1% year ago. Similarly, construction sector GVA rose 11.5% in the fourth quarter.

CII Director General Chandrajit Banerjee said, “The rebound in growth reinforces CII’s own assessment that the economy is back on track and is set for a strong recovery after the period of disruptions sparked by demonetisation and GST implementation. The GDP numbers for 2017-18 marginally overshoots the advance estimates of GDP released earlier this year.”

Assocham Secretary General D S Rawat said, “While Indian economy is in cyclical recovery, however, higher oil prices and tighter financial conditions will weigh on the pace of acceleration.”