Rise in GDP growth rate pause in declining trend: Chidambaram

Chelsea West
December 1, 2017

"After the five quarters of growth decline, we see reversal of GDP in the second quarter", he said. The growth in construction sector was projected at 2.6% compared to 4.3% in the same quarter past year.

We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion.

Jaitley said the acceleration in growth this quarter has been helped by a rapid growth in manufacturing which increased from 1.2 percent in the first quarter to 7 percent in the second quarter.

"Buoyed by the overall improved GDP number, Finance Minister Arun Jaitley said, "perhaps the impact of two structural reforms â€" GST and demonetisation were behind us".

In another tweet, he said that "6.3 per cent is far below the "promise" of the Modi government and far below the "potential" of a well-managed Indian economy". He said the important thing to note was that growth has come due to the strong performance of the manufacturing sector.

"The growth in the "agriculture, forestry and fishing", "mining and quarrying", "construction" "financial, insurance, real estate and professional services" and "Public administration, defence & other services" is estimated to be 1.7 percent, 5.5 percent, 2.6 per cent, 5.7 percent and 6.0 percent respectively, during this period", said the press release.

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"Manufacturing growth has been one of the main reasons for the encouraging growth rate figure of 6.3 per cent for 2nd Quarter", he added.

The fiscal second quarter (July-September), which coincided with the July 1 roll-out of GST, saw GDP growth accelerate to 6.3%, from 5.7% in the first quarter.

While manufacturing grew rapidly at 7% in the September quarter from merely 1.7% in the first quarter (April-June), the growth in electricity and other utilities was recorded at 7.6% and it was nearly 10% in trade, hotel, transportation and communication.

Moody's Investors Services recently upgraded India's sovereign rating for the first time in almost 14 years, saying the country was poised for fast growth because of wide-ranging economic and institutional reforms by Prime Minister Narendra Modi's government.

Government spending slowed in the quarter, growing 4.1 per cent, as against 17.1 per cent in the June quarter. Great news that quarterly GDP growth accelerates to 6.3 per cent against 5.7 per cent from the previous quarter.

In what could bring a big cheer for the government after five quarters of slump and also indicate that the Indian economy is recovering from the effects of demonetisation and GST rollout, the Gross Domestic Product (GDP) for the September quarter jumped to 6.3 per cent from 5.7 per cent in the earlier quarter.

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