The data released by the Central Statistical Office (CSO) is presenting a robust picture of the Gross Domestic Product (GDP) of the Indian Economy. India’s GDP has notched up to an impressive 7.2 % in the December quarter (Q3) of 2017-18, shedding the twin baggage of demonetisation and Goods and Services Tax (GST) launch. The figures are the best in the last five quarters and have put India back on track (DNA).
What’s heartening is the fact that India has once again emerged as the fastest growing economy in the world, marching ahead of China. However, the 7.2 % growth is still not matching the rate of growth achieved in FY2016-2017, when the growth rate reached 7.5 %(Scroll.in).
India’s recovery has been boosted by a revival in the economic demand which has registered a growth of 12 % (Livemint). As per the Q3 GDP data, if this growth rate is sustained, the Indian economy is projected to grow by $2.6 trillion by the end of March. This, not only is symptomatic of a recovering economy, but also of increase in consumer demand. In this quarter, manufacturing grew at 8.1%, trade, hotels and transport at 9%, construction at 6.8%, communication and services related to broadcasting at 9% and water supply, electricity and utility services at 6.1%. Agriculture grew at 4.1% compared to 2.7% in the previous quarter(Livemint).The growth in manufacturing and construction can prove to be a significant turnaround for the country’s economy, says Finance Minister, Arun Jaitley.
Some quarters are surprised at the GDP data which has been released. Nomura, a Japanese brokerage firm said that the sharp pickup is puzzling. Questions are also being raised about the quality of the data, particularly at the time of demonetisation, when the economy grew at a healthy rate of 7%. During that period, Nomura had pointed out that there was excessive reliance on data from the organised sector.
Our GDP growth has been boosted by the large spending of the government, which is expected to be at 10.8% in this fiscal year. The government is battling a bulging fiscal deficit of 113% for the FY2017-2018 target. Thus, although it would be difficult to inject further growth in the economy, India’s growth rate has put up a good show in the face of grim expectations.
Going ahead, we are likely to witness a steady growth trajectory as the teething problems of GST are almost over.