New Delhi: India’s GDP grew at a slower pace during October-December 2015 period (third quarter of FY2015-16) at 7.3 per cent due to negative growth in the farm sector. GDP had grown by 7.7 per cent in the July-September 2015 period (second quarter).
However, Central Statistics Office (CSO) forecast that for the whole of 2015-16 India will grow at a five-year high of 7.6 per cent, overtaking a slowing China, on the back of improvement in manufacturing and farm sectors. China grew 6.9 per cent in 2015.
While this forecast is in tune with many economists, including IMF president Christine Lagarde’s assessment that India is the one of the few bright spots in the global economy, some others feel that new series of economy numbers may not give the true picture of the economic health.
For CSO’s forecast to materialise, the Indian economy would have to grow at a rate of 7.8 per cent between January to March 2016 (fourth quarter of FY2015-16). India’s GDP had grown by 7.2 per cent in 2014-15. The previous high at 8.9 per cent was recorded in 2010-11.
The manufacturing sector is estimated to grow at 9.5 per cent in 2015-16, up from 5.5 per cent a year ago. Though some part of the country was hit by drought, the agriculture sector is projected to grow at 1.1 per cent as against a decline of 0.2 per cent in year-ago period. The growth of mining and quarrying sector, electricity and power supply and other services is likely to witness deceleration during the current financial year.
“A closer look at the break up shows that growth for the full year will be powered by a pick-up in manufacturing as the services sector is expected to witness a marginal slowdown. This has important implications for the overall economy as the government has been trying to give a push to this sector,” said Anis Chakravarty, senior director and lead economist, Deloitte, India.
He pointed out that manufacturing sector along with agriculture are the only two sector sub components that are likely to show higher growth.
“On the expenditure side, investments are likely to grow by 5.3 per cent for the full year as compared to 4.9 per cent in the previous year, which shows that capex is stable and probably moving up. Overall, we would treat this as a positive development,” said Mr Chakravarty.
As per the data for the third quarter, agriculture sector witnessed a contraction of one per cent. However the manufacturing sector grew at 12.6 per cent, and mining by 6.5 per cent.
