Economic growth will be even better in Q3 and Q4: TCA Anant

A day after India's economy in July-September period posted the first growth in five quarters, Chief Statistician TCA Anant on Friday said  he was hopeful of further acceleration in the remaining quarters of 2017-18 as the prospects of manufacturing and services were better.

The economy grew at 6.3% in the September quarter, significantly better than 5.7% in the previous one.

Agriculture, which might not have fared well in the September quarter but Anant said the overall farm production this year was much better than the average of last five years. Agriculture sector grew at 1.7% in September quarter, according to the government data.

In an exclusive conversation with DH, Anant said that the construction sector too was expected to post a positive growth in the second half of 2017-18 contrary to the misconception that front loading of the government expenditures would halt this sector's progress in the remaining period till March.

"Overall production in agriculture is much better than the average of the last five years. The prospects of growth in manufacturing and services are good. Major structural changes have been put in place which will improve the general efficiency of business so that the possibility of growth  is on a multifarious levels," Anant said.

He said the poor performance of manufacturing in the previous quarter (April-June) was due to a halt in production on fears of GST but that period has passed now. Anant said he saw manufacturing doing better in both, third and fourth quarters (October-March) on account of the GST-related postponed production coming back into the economic system. Manufacturing posted a 7% growth as against 1.7% in the previous quarter.

He said  a lot of analysis have shown that the previous practice of the government's expenditure being lumped for the last quarter was creating severe impediments in implementation of public projects including construction. This year, because the Budget was advanced by a month and expenditure started taking off well in time, the off-take in construction activity would pick up. Though the construction sector fared a bit better at 2.6% than the June quarter's 2%, analysts feared that the second half may not see any progress in construction as much of the government expenditure will go in containing fiscal deficit than on public programmes.

The only challenge to growth going forward, in Anant's views, was a slow pick up in private sector construction activities, but he was hopeful  that they would be addressed after the new regulatory regime was put in place.