India's economy grew at 2-year high of 8.2 per cent in the April-June quarter of 2018-19 on strong performance of manufacturing and agriculture sectors, increasing its lead over China to remain the world's fastest growing major economy.
The Gross Domestic Product (GDP) at constant prices (2011-12) had grown at 5.6 per cent in the April-June quarter of last fiscal, according to government data released Friday.
The size of the GDP in the first quarter of 2018-19 was estimated at Rs 33.74 lakh crore, as against Rs 31.18 lakh crore in Q1 of 2017-18, a growth rate of 8.2 per cent, as per the statement of the Central Statistics Office (CSO).
The previous high in quarterly GDP growth was recorded in the January-March quarter of 2015-16 at 9.3 per cent.
The Chinese economy had expanded at the rate of 6.7 per cent in the April-June period this year.
India's Gross Value Added (GVA) for the quarter under consideration has been estimated at 8 per cent, up from 5.6 per cent in the year-ago period.
The quarterly GVA at constant (2011-2012) prices for Q1 of 2018-19 has been estimated at Rs 31.63 lakh crore, as against Rs 29.29 lakh crore in Q1 of 2017-18, showing a growth rate of 8 per cent over the year-ago period.
The CSO said that manufacturing activities expand at the rate of 13.5 per cent in the quarter under review. The sector had witnessed a decline of 1.8 per cent in similar period last year.
Finance Minister Arun Jaitley said in a tweet that the growth represents the potential of new India. "Reforms and fiscal prudence are serving us well. India is witnessing an expansion of the neo middle class."
Niti Aayog Vice-Chairman Rajiv Kumar in a tweet said: "Excellent news of GDP hitting a 9-quarter high at 8.2 per cent".
Finance Secretary Hasmukh Adhia said it has been a remarkable speed of economic recovery in the last four quarters -- 6.3 per cent, 7 per cent, 7.7 per cent and now 8.2 per cent.
"The GDP growth rate of 8.2% for the Q1 (April-June) of fiscal year 2018-19 indicates clearly that several structural reforms introduced such as GST have started giving rich dividends.The growth in manufacturing sector (13.5%) also indicates broad based recovery of demand," he said in series of tweets.
The CSO data further said 'agriculture, forestry and fishing' segment of the economy posted a growth of 5.3 per cent as against 3 per cent year-on-year. Growth in the 'electricity, gas, water supply and other utility serives' was 7.3 per cent and in construction activities it was 8.7 per cent.
'Trade, hotels, transport, communication and services related to broadcasting' and 'financial, real estate and professional services' segements posted slower growth in comparison to the year-ago quarter.
The growth in mining and quarrying activities too was slower.
Talking to reporters, Economic Affairs Secretary S C Garg said that the robust performance in the April-June quarter "gives hope" that growth could exceed even estimates of 7.5 per cent for the year as whole.
"Excellent growth performance in I qrtr. 8.2 per cent overall growth, 13.5 per cent growth in manufacturing and over 10 per cent in capital formation.
"V shaped recovery of growth in Indian economy is complete now. We should grow at robust and steady state in 18-19 remaining fastest economy in World," he said.
Industry chamber Assocham said the best part about an impressive GDP growth "is that it is being led by employment-intensive manufacturing".
"Same is true about the construction which again is job-generating sector and grew by 8.7 per cent," said Sandeep Jajodia, President of the chamber.
Commerce Minister Suresh Prabhu said that multiple sectors register growth of over 7 per cent reflecting holistic progress towards 'New India' under the leadership of Prime Minister Narendra Modi.
In a tweet, Executive Chairman Mahindra Group Anand Mahindra linked the GDP growth number with the Asian Games, saying "...this is like receiving news of a medal... We’ve been sensing a strong recovery of the economy across our various businesses.This data supports that hypothesis. Now, to sustain momentum we need more reforms & swift decision making by policy-makers..."
The Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 12.75 lakh crore in first quarter of 2018-19 as against Rs 11.20 lakh crore in similar quarter of 2017-18.
At constant (2011-2012) prices, the GFCF is estimated at Rs 10.65 lakh crore in April-June quarter of 2018-19 as against Rs 9.68 lakh crore in similar period of 2017-18.
GFCF is considered as a barometer of investment activities.
Anshuman Magazine, Chairman, India and South East Asia, CBRE said a strong GDP growth of 8.2 per cent "builds expectations" and showcases that the economy is recovering much faster than expected from the implementation of policy reforms such as the GST last year.
President of PHDCCI Anil Khaitan said the growth of agriculture, forestry and fishing is reflecting the focus of the government on farm and rural economy during the last few years which would go a long way to strengthen the economy and put it on USD 5 trillion economy by 2025.