India’s economy likely grew at its fastest pace in last 5 quarters at 7.2 percent in the October-December quarter as consumers, businesses and the government stepped up spending. India regained its status as the world’s fastest-growing major economy last quarter, surpassing China’s growth after a gap of one year, boosted by higher government spending and a pick-up in manufacturing and services.
The second advance estimate, released by Central Statistics Office (CSO) on Wednesday, showed that the government also marginally increased its estimate for the full year’s growth to 6.6% from its earlier estimate of 6.5%. India revised upward its GDP growth for the July-Sept quarter, to 6.5 per cent, from an earlier estimate of 6.3 per cent. Manufacturing, construction, financial services and agriculture were among five of the eight sectors that recorded a pickup in GVA growth in the October-December quarter as compared to the previous quarter.
Bibek Debroy, Chairman of the PM’s Economic Advisory Council, said, “The GDP trends are consistent with the robust growth of the manufacturing Purchasing Manager’s Index (PMI), Index of Industrial Production (IIP) and consumer demand,”
The Chairman of the PM’s Economic Advisory Council, Mr. Debroy also added, “The fast recovery in the economic indicators like IIP, PMI and consumer demand reflects a positive economic sentiment and that India is on the right path to become one of the fastest major economies in the world surpassing China,” The agriculture, forestry and fishing sector is expected to grow by 3% over the entire financial year, compared with the previous estimate of 2.1%.
The GDP data could help the Narendra Modi government, which is currently facing lots of criticism over the Rs 11,500 crore fraud at Punjab National Bank and few other bad loan defaulter cases. The Prime Minister Modi is
trying to accelerate growth through higher state spending, including Rs 2,10,000 crore for recapitalization of state banks, which are recently tormented with mounting bad loans.