GDP growth at 7.2% in December quarter; India regains world's fastest growing major economy tag

India has regained the world's fastest growing major economy tag with the GDP at 7.2 per cent for October-December quarter, compared to China's 6.8 per cent. The GDP figure for the December quarter has beaten estimates in the range of 6.5 to 6.9 percent.

The third quarter GDP upturn comes on the back of a strong performance of the manufacturing sector, which has seen GVA growth at 8.1 percent as against 6.9 percent in the preceding quarter. The higher-than-predicted GDP growth number brings the much-needed relief for the economy which was reeling under the aftershocks of big policy decisions like GST and demonetisation.

The GDP data released by Ministry of Statistics & Programme Implementation gives a boost for Prime Minister Narendra Modi, especially at a time when public sector banks have been hogging the headlines for all the wrong reasons.

The agricultural gross value added (GVA) growth increased by 4.1 percent against 2.7 percent in the previous quarter and 7.5 percent in year ago quarter. Construction has seen a 6.8 percent growth compared with 2.8 percent growth in preceding and year-ago quarter.

The economy is expected to grow at 6.6 per cent in the current fiscal ending March 31, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1 per cent in 2016-17. The earlier estimate was 6.5 per cent.

The growth for the second quarter (July-September) has been revised upwards to 6.5 per cent, from 6.3 per cent estimated earlier by the CSO. The previous high was recorded at 7.5 per cent in the July-September quarter of 2016-17.

The CSO said that the real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in 2017-18 is likely to be Rs 130.04 lakh crore, as against the first revised estimate for 2016-17 of Rs 121.96 lakh crore, released on January 31.

The growth in GDP during 2017-18 is estimated at 6.6 per cent as compared to the growth rate of 7.1 percent in 2016-17, it added. The gross valued added (GVA) for manufacturing in the quarter under review grew at 8.9 per cent higher than 6.9 per cent in the previous quarter.

Similarly, the farm sector GVA grew at 4.1 per cent compared to 2.7 per cent in the previous quarter. The construction sector recorded a growth of 6.8 per cent, higher than 2.8 per cent in previous quarter.

The services segment including financial services grew at rate of 6.7 per cent up from 6.4 per cent in previous quarter.