The Indian economy saw a growth of 7.2 percent in October-December 2017 and is likely to expand by 6.6 percent in 2017-18 according to latest official estimates released on Wednesday.
Our Indian economy is poised to now move into a faster lane recovering fast from the aftermath of demonetization and the famous goods and services tax (GST). The rebound in India’s Gross Domestic Product or GDP growth from 6.5 percent in the previous quarter (July-September) will definitely help our country regain its lost status as the World’s fastest growing economy outpacing China, which grew by only 6.8 percent in October-December 2017.
Latest estimates show the trends which are seen in high-frequency indicators example corporate income and industrial output data. This is surely in tune with government’s earlier estimates. In January, the government had projected that India’s GDP or Gross Domestic Product will grow at 6.5 percent in 2017-18.
The Central Statistics Office or the CSO released its second advance estimate today which are based on actual data for the three quarters, which also give a better picture of the total health of the economy.
The CSO estimated that the Gross Value Added or the GVA which is GDP minus the net taxes, grew at 6.7 percent in October-December from 6.2 percent in the previous quarter and 6.9 percent in the same quarter, 2016-17. GVA is all set to grow at 6.4 percent in 2017-18 from the 7.1 percent figure in 2016-17.
The manufacturing sector grew by 8.1 percent in the third quarter of 2017-18, from a low of 6.9 percent in the previous quarter, and 8.1 percent in the same quarter of the previous year. The sector is now projected to expand at 5.1 percent during the full year, inching in the direction of last year’s 7.9 percent growth, which clearly indicates that the factories and firms have moved on from the irritants which were a result of GST.
Latest lead indicators show signs which are encouraging over the last few months, with the urban consumption recovering into the end of the year. The manufacturing sector has recovered from the post-GST impact along with a jump in the industrial production too. The data also suggest healthy growth of the corporate earnings in that quarter, despite a rise in the commodity prices.
Government revenue expenditure also accelerated to 24 percent from 12 percent in the past year. Non-agricultural growth has also shown signs of improvement because of better investments.
The agriculture sector saw a growth of 4.1 percent in October-December from 2.7 percent in the previous quarter, and 7.5 percent in the same quarter of the previous year. It is now sure to grow 3 percent in 2017-18 from 6.3 percent in the previous year according to CSO. Farm sector growth, however, will remain subdued because of the unfavorable estimates for Kharif output of crops like pulses, cereals, and cotton.
The construction sector also grew 6.8 percent in October-December from a low 2.8 percent in the previous quarter plus in the same quarter of the previous year, which show the output and sales of inputs, lime cement, and steel, even after the RERA Act and the GST.
