GDP growth slows down to 7.1%; lowest in 6 qtrs

GDP growth slows down to 7.1%; lowest in 6 qtrs
Indian economy grew at the slowest pace in last six quarters at 7.1 per cent in the April-June period of current fiscal mainly on subdued performance of mining, construction and farm sectors.

GDP had recorded 7.5 per cent growth in the April-June quarter of last fiscal and 7.9 per cent in January-March quarter. The previous low was 6.6 per cent GDP growth in the October-December quarter of the 2014-15 fiscal.

According to the data released by the Central Statistics Office (CSO), the Gross Value Added (GVA), which is estimated at the base price, showed a growth of 7.3 per cent in the first quarter of 2016-17.

The Gross Domestic Product (GDP) growth data is calculated under the new methodology at market price, while GVA is calculated primarily at factor cost. GDP is GVA plus taxes on products minus subsidies on them.

The economic activities which registered growth of over 7 per cent in the April-June quarter, over year-ago period, are manufacturing; electricity, gas, water supply & other utility services; trade, hotels, transport & communication and services related to broadcasting; financial, insurance, real estate and professional services and public administration, defence and other services.

Growth in agriculture; forestry and fishing; mining & quarrying and construction is estimated to be 1.8 per cent, (-) 0.4 per cent, and 1.5 per cent respectively.

Growth in GVA at basic prices during the April-June quarter is estimated at 7.3 per cent as compared to the growth rate of 7.2 per cent a year ago. The agriculture, forestry and fishing sector has shown a growth of 1.8 per cent in its GVA during the first quarter of this fiscal as against the growth rate of 2.6 per cent in the year-ago period.

Growth in mining and quarrying was 0.4 per cent during April-June quarter as against the growth rate of 8.5 per cent in the corresponding period of last year. The manufacturing sector registered 9.1 per cent growth during first quarter compared to 7.3 per cent a year ago.

The construction industry is estimated to have grown by 1.5 per cent in first quarter as against 5.6 per cent year ago. GVA growth in services sector during first quarter is estimated at 9.6 percent as against 8.8 per cent 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. Public administration, defence and other services have grown at 12.3 per cent as against 5.9 per cent a year ago.

According to the statement, the growth in collection of Union Excise duties, custom duties and service tax was  61 per cent, 18 per cent and 29 per cent respectively in the first quarter of this fiscal, as against growth of 104 per cent, 22 percent and 14 per cent respectively a year ago.

It also said that the major subsidies grew by 53 per cent in first quarter of this fiscal as against decline of 26 per cent a year ago. The growth in private final consumption expenditure at current prices, which is an indicator of demand in economy has grown at 11.7 per cent in first quarter.

Similarly, the Gross Fixed Capital Formation which an indicator of investment has declined by 1.1 per cent at current prices in first quarter compared to a growth of 6.8 per cent a year ago.
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