Rise in Q2 GDP signals economic recovery: India Inc

GDP numbers 'very encouraging': Key facts

Government's reforms to push economic growth are working can be seen from that manufacturing has shown robust growth of 7% in Q2 and services at 7.1%.

Jailtey said achieving a 10% economic growth rate is "very challenging" and double-digit GDP growth will depend on how the world economy moves.

The growth in the agriculture slowed to 1.7% compared to 2.3% in the last quarter and 4.1% in the same quarter a year ago.

Pankaj Patel, president, FICCI, said, "The monetary policy announcement next week will be a ideal timing to give another shot to boost the sentiment".

He further said that the two structural reforms - GST and demonetisation - will benefit the economy in the medium and long-term. "Gross fixed capital formation has also picked up from last year's lacklustre pace", he said. He has been grappling with slowing growth in the past five quarters, with the economy dragged down by subdued private investments, an unprecedented cash ban imposed previous year and the introduction of a country-wide consumption tax in July. The growth in agriculture, forestry and fishing was 1.7 per cent, mining and quarrying 5.5 per cent, construction 2.6 per cent, and financial, insurance, real estate and professional services 5.7 per cent. "Although manufacturing volume growth in Q2 FY18 was not as strong as we had initially expected on the basis of restocking after the GST, rising commodity prices and fewer discounts led to a revival in earnings", Icra Principal Economist Aditi Nayar said. Jaitley said the Goods and Services Tax (GST) started with different tax rates and they have rationalised rates on many items.


"Indias economic stress continues; GDP far below at 6.3 pc compared to 7.5 pc of Q2 of a year ago! - a close scrutiny reveals the real picture of the economic mess created by BJP Government", he said in a statement.

The impact of GST was limited to one quarter, mainly because of de-stocking by corporates. Agriculture sector performance, he said, was held up because of the non-crop segment.

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".

Chief Statistician T C A Anant also said increase in Q2 GDP to 6.3 percent shows significant trend reversal in growth rates.

As far as the CSO data is concerned, agriculture growth slumped to 1.7 per cent, but the economic activities that registered growth of over 6 per cent in the second quarter of 2017-18 year-on-year are manufacturing, electricity, gas, water supply and other utility services, trade, hotels, transport and communication and services related to broadcasting.

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