Economy grows 6.3% in Q2 after 15 months

Jaitley: India has standardised itself for growth rate of 7-8%

Mr. Anant said the GDP data for the second quarter could see an upward revision when the government released its revised estimates as it would reflect the final indirect tax collections - a figure that would include the taxes collected from late filers as well. "After the five quarters of growth decline, we see reversal of GDP in the second quarter", he said.

With the sign of growth trajectory, Finance Minister Arun Jaitley remained optimistic of a higher growth rate in coming quarters. There are expectations of a rebound in economic activities after GDP growth of a mere 5.7 per cent in the first quarter of the fiscal.

"In a normal year, businesses are conversant with the tax processes, and so know their tax liability, so the collections are usually in line with what is anticipated", TCA Anant, Chief Statistician of India and Secretary to the Ministry of Statistics and Programme Implementation, said on Thursday. The agriculture sector, on which a large section of the population, specially in rural areas, are dependent for their livelihood, saw a slower growth of 1.7 per cent in the second quarter, against 2.3 per cent in the first one. Coming close on the heels of Moody's recent upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy is a shot in the arm for the Modi government, which has been fighting off charges that demonetisation and GST launch disrupted the $2.4-trillion economy. But we can not say now whether this will mark an upward trend in the growth rate.

In a relief for the Narendra Modi government, India's GDP growth finally picked up in the second quarter (July to September) of 2017-18, expanding by 6.3 per cent mainly due to good performance by the manufacturing sector. "It's possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later...inventory accumulation effect may persist in the third quarter as well", he explained.

As per the data, electricity and other utilities grew by 7.6 per cent (from 7 per cent in the previous quarter) and trade, transportation and communications expanded by 9.9 per cent (from 11 per cent in the previous quarter). To scale to 10 per cent rate is "very challenging" and it will not depend on domestic factors only but on how the world is moving, he said. The growth in public administration, defence and other services also stood at 6 per cent.

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