India’s Gross Domestic Product (GDP) registered a growth rate of 8.2 per cent in the first quarter of the fiscal year 2018-19, beating the estimates of 7.6 per cent by economists. The 8.2 per cent growth rate of the Indian economy was the highest in the last two years. The previous high was recorded in the January-March quarter of 2015-16 at 9.3 per cent.
According to the data released by the Central Statistics Office (CSO) on 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 CSO data, agriculture, forestry and fishing segment of the economy posted a growth of 5.3 per cent as against 3 per cent year-on-year. The growth in the electricity, gas, water supply and other utility services was 7.3 per cent and in construction activities it was 8.7 per cent.
However, trade, hotels, transport, communication and services related to broadcasting and financial, real estate and professional services segments posted slower growth in comparison to the year-ago quarter. The growth in mining and quarrying activities too was slower.
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Government says economy may exceed 7.5 per cent in 2018-19
Enthused by the data, Finance Minister Arun Jaitley said that the growth in the economy represented the potential of “New India”.
“India’s GDP for the first quarter this year growing at 8.2% in otherwise an environment of global turmoil represents the potential of New India. Reforms and fiscal prudence are serving us well. India is witnessing an expansion of the neo-middle class,” Jaitley said in a series of tweets.
Commenting on the April-June quarter results, Economic Affairs Secretary SC Garg said that India’s economy was on a steady growth path and added that the fiscal deficit will not exceed 3.3 per cent of the GDP in 2018-19.
Finance Secretary Hasmukh Adhia used the data to validate the “ill-implemented” Goods and Services Tax (GST) and said that it had 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 the fiscal year 2018-19 indicates clearly that several structural reforms introduced such as GST have started giving rich dividends. The growth in the manufacturing sector (13.5%) also indicates broad-based recovery of demand," Adhia said in series of tweets.
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Congress happy but fears repeat of 2016-17
Reacting to the Q1 data, former finance minister and a noted economist P Chidambaram said that the first quarter growth rate was based on the lowest base of 5.6 per cent in Q1 2017-18. He expressed fears that the effect will not last long and the annual growth rate may be like last year’s.
“Happy that the rate of growth has quickened, but look at the table once again. Q1 growth rate is based on the lowest base (5.6) in the last 8 quarters. The base effect will not be so favourable. And when we reach Q3 and Q4, the rate of growth may decline and the annual growth rate may be more or less like last year's,” the Congress leader said in a series of tweets.
(With inputs from agencies)