The Indian economy grew 7 percent in the first quarter of this fiscal, showing signs of slowing vis-a-vis the 7.5 percent expansion in the quarter before. But the growth was much higher than 6.7 percent registered in the first quarter of the last fiscal….reports Asian Lite News
As per official data on gross domestic product (GDP) released by the Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation, showed that the growth of 7 percent was led mainly by expansion in commercial and financial services and manufacturing output.
GDP which is the aggregate market value of all the goods and services produced in the country, had expanded by 6.7 percent in the corresponding quarter of last fiscal.
“GDP at constant (2011-12) prices in Q1 of 2015-16 is estimated at Rs.27.13 lakh crore, as against Rs.25.35 lakh crore in Q1 of 2014-15, showing a growth rate of 7.00 percent,” the CSO was quoted in a statement.
“Quarterly GVA (gross value added) at constant (2011-2012) prices for Q1 of 2015-16 is estimated at Rs.25.80 lakh crore, as against Rs.24.10 lakh crore in Q1 of 2014-15, showing a growth rate of 7.1 per cent over the corresponding quarter of previous year,” the statement said.
The GVA which is a gauge to measure the value of goods and services produced in a particular sector or a grouping of industries had stood at 7.4 percent in the corresponding quarter of last fiscal.
The commercial services segment which includes trade, hotel, transport, communication and services related to broadcasting expanded the fastest in the quarter under review at 12.8-percent from 12.1 percent in the Q1 of last fiscal.
The financial services sector which comprises of industries like financing, insurance, real estate and professional services grew by 8.9 percent from 9.3 percent in the corresponding quarter of 2014-15.
Manufacturing output rose by healthy 7.2 percent from 8.4 percent in the first quarter of last fiscal.
However, the farm sector expanded by 1.9 percent, below the overall growth rate, and so did the mining industry (by 4 percent), energy by (3.2 percent) and construction (by 6.9 percent), and social and defence services (by 2.7 percent).
Reaction from the industry stakeholders.
* Jyotsna Suri, president, Federation of Indian Chambers of Commerce and Industry
Even though growth of 7 percent is encouraging in the current global economic scenario, we need to move this figure up given the imperative of employment generation. As global demand situation is weak, domestic demand needs to be strengthened. Both consumption and investment levers need a thrust.
* Chandrajit Banerjee, director general, Confederation of Indian Industry
The impressive 7 percent GDP growth at the onset of the first quarter of the current fiscal, which is higher than 6.7 percent experienced in the same period last year, bolsters the perception that the economy is showing signs of a turnaround and is on the road to recovery.
* Rana Kapoor, president, The Associated Chambers of Commerce and Industry of India
Agriculture, mining, manufacturing, electricity, gas, water supply and other utility services remain to be key areas of concern as the gross value added for all these sectors has slowed down in first quarter of 2015-16 vis-a-vis first quarter of 2014-15, though some progress is seen in trade, hotels and communications and construction sectors
* Devendra Kumar Pant, chief economist, India Ratings & Research
First quarter GDP growth came in line with our forecast of 7 percent. The dismal electricity sector performance pulled down first quarter 2015-16 industrial growth to 6.5 percent from 7.7 percent. GDP growth this year will be led by consumption growth (backed by falling inflation and monetary easing), investment growth revival will take place once capacity utilisation starts increasing. Weak global demand also attributed to lower growth in first quarter.
* Debopam Chaudhuri, chief economist & vice president of Research at ZyFin Research
The GDP growth estimates are in line with expectations. We don’t see any significant recovery over the next two quarters with economic activity slumping further. Private consumption continues to remain less than 60 percent of the GDP suggesting low aggregate demand conditions.
* K Sandeep Nayak, executive director & CEO, Centrum Broking
The GDP growth rate of 7 percent is a tad below expectations. However, a 7 percent growth is still the fast lane in comparison to the growth rates being achieved in other comparable economies of the world or for that matter the developed world. This data read together with a benign CPI we had earlier this month increases the probabilty of rate cut by RBI in the policy due later this month.