Data released by the Central Statistics Office revealed that the Indian economy remained the world's fastest growing major economy in the July-September quarter with the help of the agriculture sector. Data showed the economy grew an annual 7.3 per cent in the July-September quarter, marginally faster than previous quarter's 7.1 per cent. It grew 7.6 per cent in the said quarter in 2015-16.
Growth was powered by the farm sector which grew an annual 3.3 per cent during Q2 compared to 1.8 per cent expansion in the previous quarter. Manufacturing sector growth slowed to 7.1 per cent in July-September compared to 9.1 per cent expansion in April-June quarter. The 7.3 per cent GDP growth in the second quarter is higher than China's 6.7 per cent growth. Economists said growth for the full year could slow to 7 per cent due to the impact of the government's decision to scrap some high value notes.
Madan Sabnavis, chief economist at Care ratings said, "While we had estimated a GDP growth of 7.3 per cent for FY17, post demonetisation on the assumption of attainment of normalcy from January 2017, we estimate that GDP could slow to 7 per cent in FY17 with a strong downside risk as barring the government sector all the other segments of the economy have recorded subdued growth. An aggressive growth of 7 per cent for FY17 would be contingent on growth in Q3 being in the range of 5.5-6 per cent and that in Q4 being 7.5-8 per cent," he said.
India's chief economic adviser, Arvind Subramaniam said the government was analysing data against the backdrop of uncertainty in the second half of the fiscal year. "What we have for first half are actual numbers. It shows good consistent performance. For second half, we will have to see, there is a lot of uncertainty. We have to analyse it before we say something."
India projected to grow 7.6% in 2017: UN report
A UN study said that the Indian economy was projected to grow at 7.6 per cent in 2017 as investment regains momentum and manufacturing base strengthens on the back of structural reforms in the country, crediting India and China for steady growth of the Asia-Pacific region. It said in India while growth in the first quarter of the current fiscal year (April-June 2016) moderated due to a contraction in fixed investment, a rebound is expected. "Initially, growth will be driven by a rebound in agriculture due to normal monsoon rain, which along with civil service pay revisions will support broad-based consumption growth. Later, growth will be underpinned by a recovery in private investment as the recent push to accelerate infrastructure spending and measures to create a better investment climate - due in part to the passage of the goods and services tax and bankruptcy code," it said.
