Economy grows 5.7% in Q1; govt optimistic

Sectors show positive news despite monsoon blues

Economy grows 5.7% in Q1; govt optimistic

Finance Minister Arun Jaitley on Saturday exuded confidence that the economy would accelerate sooner than expected with the government’s steps to hasten decision making and ease of doing business in the country.

He said the better than expected economic growth numbers in the April-June quarter were pointing towards the initiatives that the government has taken in the past three months.

“Most sectors are indicating positive news and this is in the face of a relatively challenging monsoon this time...the manufacturing curve has turned. Services are looking up. In the first quarter of this year, a 5.7 per cent growth is encouraging.

With the long-term impact of all the new initiatives setting in, I am sure the impact in the coming quarters will be much larger,” Jaitley said at a press conference.

After two years of less than 5 per cent growth, India’s economy grew fastest in April-June at 5.7 per cent , sharply higher than 4.6 per cent expansion in the previous three months.

Jaitley said that almost all macro-economic parameters have shown growth in the past couple of months which has made him more confident of achieving the fiscal deficit target of 4.1 per cent of gross domestic product in the current financial year.

“My confidence today in the (fiscal deficit) target is much more, if this trend were to continue...,” Jaitley said addressing a press conference.

“What was then (while presenting the Budget) accepted as a challenge, I today feel... is something which is certainly achievable," he said.

In his maiden Budget, presented last month, Jaitley had kept the fiscal deficit target for 2014-15 at 4.1 per cent of the GDP, the same as the Interim Budget.

To a question, Jaitley said the concern of the government on inflation front had somewhat receded with the prices of essential commodities, especially food items, coming down considerably.

He, however, said that the current spike in some vegetable prices were due to seasonal factor and hoped they would come down soon.

Deliberating on the future agenda of the NDA government, Jaitley said, the government would soon roll out disinvestment plan, push Goods and Services Tax and try to get the insurance bill through Parliament in the Winter Session to be held in November.

Jaitley also sought to dismiss any perception that power was centralised with Prime Minister Narendra Modi and said ministers enjoyed a large measure of decentralisation with accountability.

“If you have a very active prime minister, along with this decentralised authority which has been given to us, there will be an element of accountability,” the minister added.

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