Rise in Q2 GDP signals economic recovery: India Inc


Bloomberg PollBloomberg poll of 46 economists says that India's gross value added (GVA) growth in the July-September is likely to grow at 6.2 per cent from a three-year low of 5.6 percent in the previous quarter.

Coming close on the heels of Moody's recent upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy comes as a shot in the arm for the Modi Government, which has been fighting off charges that demonetisation and GST launch disrupted the United States dollars 2.4-trillion economy.

"It is well accepted that investment in infrastructure is essential to growth, it increases the productivity of existing resources and crowds in private investment, which in turn creates more jobs and leads to economic well-being", he said.

This was a break with five quarters of declining trends in growth, but India remained behind China in economic expansion.

The new numbers indicate that the economy is recovering after it hit a temporary slump following last year's note ban and the rollout of GST.

Patel said that the Reserve Bank's upcoming monetary policy review next week "will be a flawless timing to give another shot to boost the sentiment".

"The improvement in the GVA growth of manufacturing and mining was the key factor underpinning recovery in Q2 FY18".

Moody's expects the world's seventh-largest economy to grow by 6.7 per cent in 2017-18 and by 7.5 per cent in the next. "Setbacks in the agri performance can have a cascading impact on the consumer inflation", Rawat said in a statement.

Shah termed the growth in the manufacturing sector as a very positive sign, claiming that it will create more employment and boost the Make in India project.

Speaking at the HT Leadership Summit here, he said India has done well by growing at 7-8 per cent during the last three years.

"However, GST implementation glitches, on-going changes in the GST structure, and a possible cut in capex due to rising fiscal stress may limit upside in the subsequent quarters".

"Benefits of structural reforms by Narendra Modi will boost GDP in future", he said. "The agriculture sector seems to have underperformed given the normal rainfall and kharif output".

Former finance minister P Chidambaram, however, said 6.3% growth was "far below the promise of Modi government and potential of the well managed Indian economy".

On a sequential basis, India's GDP growth for Q2 of the current fiscal went up to 6.3 per cent, from 5.7 per cent reported during the first quarter of 2017-18.

"Assocham secretary general D.S. Rawat said, ". agriculture remains an area of concern with a mere 1.7% in the second quarter against 2.3% in the previous quarter.