India's Q2 GDP growth up at 6.3%, reverses 5 quarters' slump

Finance minister Arun Jaitley during the Hindustan Times Leadership Summit on November 30

Economic activities that posted over 6 per cent Y-o-Y growth include manufacturing, electricity, gas, water supply, trade, hotels and so on.

According to data from the Central Statistics Office (CSO), the GDP for Q2 stood at Rs 31.66 lakh crore, or a growth of 6.3 per cent. India's GDP had grown at 7.2 per cent in the corresponding quarter past year.

In the first two quarters of the current financial year, India's gross value added (GVA) in basic price grew by 5.83 per cent - 5.56 per cent in the first quarter and 6.1 per cent in the second quarter.

"We will be updating the forecast for India, including the growth rate, and that will be coming January with the update of our World Economic Outlook", IMF spokesman Gerry Rice said. While the GVA data for the sector appear, on the face of it, to be significantly at variance from the Index of Industrial Production data that had been reported for the last quarter, the Central Statistics Office made it clear that the second-quarter IIP manufacturing growth figure of 2.2% was indeed factored in and used as a proxy for the approximately one-fifth of manufacturing GVA contributed by the "quasi-corporate and unorganised segment".

Ahead of Gujarat elections, India's GDP (Gross Domestic Product) growth rate for the second quarter of the current fiscal has brought forth reasons for cheer for the Modi Government, was being criticised by opposition as the country's GDP had been sliding for the last five quarters after demonetisation. Last year Q2 GDP growth was 7.5% and this year it is 6.3%.

Finance Minister Arun Jaitley remained optimistic of a higher growth rate in coming quarters. Agriculture grew at 1.7 per cent, while financial services and real estate notched up a 5.7 per cent growth.

Annual growth in consumer spending, which powers more than half of the $2.3 trillion economy, slowed to 1.5 percent in the September quarter from 6.7 percent in the previous quarter.




"The pick-up signals fading impact of demonetisation and destocking that preluded the implementation of the Goods and Services Tax (GST)", Crisil said in a note. "We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion", he said in a series of tweets.

"Also the figure for fixed capital formation means that actually investments are moving up", he added.

Finance Secretary Hasmukh Adhia said the GDP number may go up when it is finally revised.

"Growth numbers are in sync with the expectations and re-affirm that signs of recovery are in sight", said Ficci President Pankaj Patel.

Industry chamber CII Director General Chandrajit Banerjee described it as a "great confidence booster".

She further added, "Lower collections after disruptions caused by GST implementation could have affected the growth".

Modi's administration hopes the ratings upgrade can attract more foreign investors, who pumped $15 billion into Indian equities in July-September, up 44 percent from the previous quarter.

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