India's economy to grow fastest in 3 yrs: govt data

16 Jan '19

2 min read

India’s economy is projected to grow at its fastest pace in three years in fiscal 2018-19, recovering from the impact of demonetisation and the goods and services tax (GST). India will retain its ranking as the world’s fastest-growing economy, the government said. Gross domestic product (GDP) is forecast to grow 7.2 per cent, up from 6.7 per cent last year.

Gross value added (GVA) growth is seen at 7 per cent against 6.5 per cent last year, according to according to the first, full-fiscal-year estimate released by the Central Statistics Office (CSO) recently.

The forecast is a bit lower than 7.4 per cent estimated by the Reserve Bank of India (RBI). The International Monetary Fund (IMF) has forecast 7.3 per cent growth in the current fiscal and 7.4 per cent in the year after.

The growth number seems realistic and may not a revision as it fairly reflects the present situation, a news agency quoted DK Joshi, chief economist at ratings agency Crisil, as saying.

The Indian economy grew 7.6 per cent in the first half of the fiscal, suggesting a moderation in the second half with liquidity constraints and high crude prices a drag in the third quarter. Growth had declined to a below-expectation 7.1 per cent in the second quarter from 8.2 per cent in the first quarter.

The higher economic growth rides on a strong recovery in investments. Gross fixed capital formation is up 12.2 per cent this fiscal against 7.6 per cent in the last.

Private consumption is forecast to slow to 6.4 per cent rise this fiscal from 6.6 per cent in the last. Government consumption is also moderately lower at a 9.2 per cent rise this fiscal against 10.9 per cent in the last.

CSO sees manufacturing sector growth at 8.3 per cent compared with 5.7 per cent a year ago. Farm sector growth is projected at 3.8 per cent, slightly ahead of 3.4 per cent last fiscal. (DS)

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