Q1 GDP growth at 5.7% lowest in 3 yrs

India’s economic growth hit a three-year low at 5.7% in April-June quarter of the current fiscal, pulled down by poor performance of the manufacturing sector.

The government said pre-GST de-stocking as caution by firms could be the main reason for manufacturing sector slowing down to 1.2% growth. It admitted that the low GDP was a challenge for the government in the coming quarters.

“It throws up challenge for the economy and in next quarters we really require to work, both in terms of policy and investment, to improve upon these figures,” Finance minister Arun Jaitley told mediapersons after the GDP numbers were released.

The economy had recorded 7.9% growth in the same quarter (Apr-Jun) last year (2016-17).
Manufacturing sector had expanded 10.7% in the same period. Independent economists, however, said that the impact of November 8 note ban continued to linger and choked consumption and investment.

Services sector, especially trade, hotels and transport grew 8.7% as against 7% last year. It strengthened government’s belief that demonetisation had scarce impact on the economy.