The Gross Domestic Product announced today, recovered to 6.3 per cent, from a three-year low of 5.7 per cent in the June quarter.
The GDP at constant (2011-12) prices in Q2 of 2017-18 is estimated at Rs 31.66 lakh crore, as against Rs 29.79 lakh crore in Q2 of 2016-17, showing a growth rate of 6.3%.
After almost 5 quarters of decline, GDP marks a reversal which is very encouraging, TCA Anant, Chief Statistician of India, said, adding that construction continues to be low. "It is indicator driven and based on steel and cement, and those numbers have not show high growth."
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According to Central Statistics Office (CSO) data, the economic activities that registered growth of over 6 per cent in the second quarter are manufacturing, electricity, gas, water supply, other utility services and trade, hotels, transport and communication, and services related to broadcasting.
The agriculture, forestry and fishing sector is estimated to have grown by 1.7 per cent.
Analysts had been expecting an higher dataprint for the September quarter GDP, after the disappointing performance in the preceding quarter.
"The first quarter growth at 5.7 per cent--a three- year low--did cause a lot of heartburn, but we strongly believe that Q2 growth is likely to trend higher and might be in at 6.3-6.4 per cent (gross value added at 6.1-6.2 per cent) with a downward bias," economists at SBI said in a note Wednesday.
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Their optimism comes from the improving macroeconomic indicators across sectors, especially those affected by the note-ban that had dragged down the June quarter numbers.
Growth had slid to a three-year low of 5.7 per cent for the three months to June on the spillover effects of the note ban and the GST implementation.
Blaming the dismal Q1 slowdown due to poor consumption demand, contraction in manufacturing due to GST disruptions, and declining in mining activity, SBI economists said recent macroeconomic indicators point to an overall recovery.
It pointed out the 10-month high manufacturing output in September at 3.4 per cent, mining at a five-month high of 9.4 per cent and electricity production grew 7.9 per cent.
It also used the earnings data from over 2,700 corporates to paint an optimistic picture and specifically mentioned the air transport sector where companies have posted a 28 per cent rise in revenues.
It can be noted that the slowdown in the growth activity had led a concerned government to declare that it is looking at multiple ways of upping the activity, including through a growth stimulus.
(With inputs from agencies)
