Expert Views: India's economy grows 6.3 percent in July-Sept

Dec 03, 2017, 01:10
Expert Views: India's economy grows 6.3 percent in July-Sept

After sliding for nearly five quarters, country's economy has rebounded from a three-year low to swell by 6.3 per cent in July-September quarter.

The government accounts data, released earlier in the day, showed that the Centre's fiscal deficit touched 96 per cent of the budget estimate in the first seven months of the year.

The Gross Value Added (GVA) which is the total value of goods and services produced in the country after deducting the input cost accelerated 6.1% in the September quarter from 5.6% in the last quarter.

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To scale to 10 per cent rate is "very challenging" and it will not depend on domestic factors only but on how the world is moving, he said.

There are expectations of a rebound in economic activities after GDP growth of a mere 5.7 per cent in the first quarter of the fiscal.

He further said that the two structural reforms - GST and demonetisation - will benefit the economy in the medium and long-term.

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Government spending slowed in the quarter, growing 4.1 per cent, as against 17.1 per cent in the June quarter.

Expressing concern on the GDP numbers, Finance Minister Arun Jaitley said, "Last five quarters had witnessed a downward trend, GDP at 6.3% marks the reversal of that trend". Mr Anant said, the manufacturing sector in the second quarter of 2017-18 grew by 7 per cent. "Gross fixed capital formation has also picked up from last year's lacklustre pace", he said.

Former finance minister P Chidambaram, a senior leader of the opposition Congress Party, said the result was "far below the promise of the Modi government and far below the potential of a well-managed Indian economy". "It's possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later...inventory accumulation effect may persist in the third quarter as well", he explained. He also said the GDP growth of 6.3 per cent this quarter had been helped by a rapid growth in manufacturing that increased from 1.2 per cent in the first quarter to 7 per cent in the second quarter. The growth of eight core sector industries, however, slowed to 4.7 per cent in October, down from 7.1 per cent recorded in the previous period.

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TMC chief and West Bengal Chief Minister Mamata Banerjee was, however, more vocal in her criticism and claimed that a growth of 6.3 per cent was "no growth".