India’s GDP for the 2016-17 fiscal’s second quarter ended September, estimated at Rs 29.63 lakh crore, recorded a growth of 7.3 per cent compared with 7.1 per cent in the first quarter, data released on Wednesday showed.
However, the Gross Domestic Product growth for second quarter was slower than the 7.6 per cent increase posted in the corresponding quarter of the last fiscal (2015-16).
Reacting to the GDP numbers, India Inc urged the government to take steps to revive fixed investments and production of capital goods.
In terms of gross value added (GVA) — considered a better measure of economic performance, as it excludes product taxes and subsidies — of Rs 27.33 lakh crore for the quarter, the growth at 7.1 per cent was slower compared with 7.3 per cent in the previous year, mainly due to a contraction in mining and deceleration in manufacturing.
Within the GVA, the manufacturing activity slowed in the September quarter at 7.1 per cent, against 9.2 per cent in the same quarter of the previous year. Government services, including defence, logged a robust growth of 12.5 per cent, against 6.9 per cent in the previous year.
The primary sector, including agriculture and fisheries, saw a growth of 3.3 per cent, against 2 per cent, while that for construction also rose to 3.8 per cent from 0.8 per cent.
Mining and quarrying output, which had expanded by 5 per cent in the first quarter of the previous fiscal, shrank (-)1.5 per cent.
“Agriculture does better than last year owing to better rainfall and sowing,” Chief Statistician T.C.A. Anant told reporters here, while releasing the report.
“Mining and quarrying have done worse than last year… but this comes on the back of a sharp increase in mining and quarrying in 2015,” he added.
Commenting on the figures, industry chamber Assocham urged the government to take doable steps to revive fixed investments and production of capital goods which are falling continuously because the growth supported by consumption demand does not have sustainable impact.
“When private investments are lacking, public investments should be increased in roads, railways, inland waterways and government should take policy initiatives to unclog the cash flows in large projects and to boost construction,” said Assocham Secretary General D.S. Rawat.
“The downside risks to India’s economic growth still prevail in the form of the recently implemented demonetisation policy, risks from Brexit, transition of Chinese economy, protectionist measures adopted by advanced economies, monetary policy’s inability to fuel growth in developed economies, and unsolved problem of banks’ non-performing assets in India,” he added.