RBI Given Ammunition To Hold Rates As Indian Economy Recovers

Adjust Comment Print

He said deceleration trends in overall growth witnessed since Q1 of the last fiscal year had been reversed.

Agricultural growth fell to 1.7 per cent in Q2 from 2.3 per cent in the previous quarter because of a sharp decline in the production of foodgrains during the kharif season. On the other hand, Moody's predicts that India would be the world's seventh-largest economy to grow at 6.7 per cent in 2017-18 and at 7.5 per cent in the next fiscal.

Jaitley further said that impact of demonetisation of high value currency notes of Rs 500 and Rs 1000 in November previous year was limited to one or two quarters. The country's fiscal deficit crossed 96 per cent of budget estimates at October-end, according to government data.

The economic growth rate had slipped to three-year low of 5.7% in the first quarter of 2017-18 financial year.

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

Reacting to the GDP growth, Chief Statistician TCA Anant hinted that the numbers could be revised upwards as businesses uncertain of the new GST regime may have accounted for lesser taxes.

Nine dead, 37 injured in Taliban attack on Peshawar agriculture college
The area where the incident occurred is a hub for educational institutions including the University of Peshawar . He said three terrorists were killed by security forces after a gunfight which lasted an hour.

"Manufacturing reported growth of 7 per cent, electricity, gas and water supply at 7.6 per cent, and trade, hotels, transport and communication grew at 9.9 per cent", he said.

This prompted Finance Minister Arun Jaitley to say that the impact of demonetisation and the GST were behind us.

"The September quarter GDP growth, he added, is quite a significant trend reversal and has been driven by pick-up in manufacturing". The growth in construction sector was projected at 2.6% compared to 4.3% in the same quarter past year.

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".

The Central Statistics Office's (CSO) data disclosed that GDP for Q2 stood at Rs 31.66 lakh crore, or a growth of 6.3 per cent.

Modi government hopes the ratings upgrade can attract more foreign investors, who pumped Dollars 15 billion into Indian equities in July-September, up 44 percent from the previous quarter. 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.

Comments