India continues to be world’s fastest growing major economy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Central Statistics Office (CSO) on Thursday said that Indian economy grew  at 7.7% in the fourth quarter ended March 31, 2018 making it the fastest growing major economy in the world.

CNBC-TV18 poll suggested that the economy would grow at 7.4% in the given quarter.

India’s GDP for the full year ended March 31, 2018 stood at 6.7% beating a poll of 6.6%.

Manufacturing GDP grew at 9.1% as against CNBC-TV18’s estimate of 9%. Mining growth stood at 2.7% as against CNBC-TV18’s poll of 1%.


source: tradingeconomics.com

Agriculture in the last quarter of past fiscal grew at 4.5% as against poll of 3.2%.

Ashima Goyal, member of Prime Minister’s Economic Advisory Council, said, “This agricultural growth projects that there is diversification to other high valued items and other income sources. Construction doing so well again suggests that maybe low income housing and the radar has settled and so there is a source of employment which is also a good number.”

Finance grew short of estimates, at 5% versus an expectation of 8%.

GVA or gross value added, growth stood at 6.5% in the quarter, CSO data showed.

With this GDP growth rate, January-March quarter became the fastest expansion since before the government’s surprise decision in November 2016 to scrap high-value currency notes and a botched implementation of a goods and services tax (GST) in July last year stalled growth, Reuters said.

According to CSO’s second advance estimates, for the entire FY18, the GDP growth was expected to be 6.6%.

DK Joshi, chief economist, Crisil said, “GDP growth at 7.7% in the fourth quarter of last fiscal was driven by a 11.5% surge in construction (over a weak base) and above-trend growth in agriculture. Investments expanded at 14.4%- supported by govt as pvt corp sector is still deleveraging and faces capacity overhang.”

Hasmukh Adhia, finance secretary, Government of India, said, “The constant increasing trend of quarterly GDP numbers in the four quarters of 2017-18 at 5.6%, 6.3%, 7% and 7.7% indicates that the structural measures of reforms undertaken by Government is now bringing rich dividends in the form of higher GDP growth rate.”

Subhash Garg, secretary, Department of Economic Affairs, said, “We have maintained Q4 GDP growth will be better. Good growth in capital goods, construction, manufacturing indicates a turnaround in the economy.”

He further said that the government is retaining its GDP forecast at current levels despite Moody’s take on oil price impact.

On Monday, Economic Affairs Secretary Subhash Chandra Garg said growth in Asia’s third largest economy was expected to grow 7.3-7.5%.

Rating agency ICRA has estimated the GDP growth rate for India in Q4 of FY18 is expected to be at 7.4%.

The research report released by State Bank of India (SBI) expects a growth rate for Q4 FY18 to be around 7.6% and, subsequently the FY18 growth to be at 6.7%.

In the previous quarter (October – December 2017 (Q3 FY18), India registered a 7.2% GDP growth as compared to 6.5% and 5.7% growth in the Q2 FY18 and Q1 FY18, respectively.

A Reuters poll had suggested that the economy grew at 7.3% in the given period ensuring the country remained world’s fastest growing major economy.

The May 24-29 poll of 55 economists predicted that GDP expanded an annual 7.3% in the first three months of 2018, a touch faster than the 7.2% achieved in the last three months of 2017 — and well above China’s pace of 6.8% for the quarter ending in March.

Forecasts ranged from 6.9 to 7.7%.

GDP is sum total of all goods and services produced in a country in a given period.

Industry chambers Confederation of Indian Industry (CII) on Monday said that it expects India’s economy to grow at 7.3-7.7% in 2018-19 on the back of “sustained structural reforms”, recovery in global markets and a normal monsoon.

“The impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around,” CII President Rakesh Bharti Mittal was quoted as saying in a statement.

Adhia also said, “What is most noticeable is the increase in the growth rate of GVA of manufacturing sector in the last two quarters of 2017-18 at 8.5% and 9.1% at constant price. We would like to believe that GST has given a big boost to the industrial sector.”

Read our full coverage on India’s GDP numbers here.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow