Q1FY19 GDP beats estimates, grows at 8.2 percent

Alicia Cross
September 1, 2018

The latest figures, which mark India's highest growth rate in eight quarters, shot up from 5.6 percent for the same period previous year and reinforces the nation's status as one of the world's fastest growing economies.

For instance, the manufacturing sector grew at 13.5% in the June quarter compared to -1.8% a year ago.

This jump ahead of national elections next year would help bolster the government amid a debate over its economic record versus that of its predecessor following the release of back-series data recently. "Moreover, pre-election spending means that a reversal in the widening of the states' deficit seen in recent years is unlikely", it added.

The rapidly growing GDP is a reflection on the transformative changes being ushered in by the Modi government, Shah said, adding that Indian economy is witnessing unprecedented growth in every sector, from manufacturing to agriculture.

He said, "If you calculate the core GVA, which is basically the private sector, that has actually surged to 8.1 percent as against 7.2 percent". Growth in these sectors has increased by 15.3 and 6.9 percentage points respectively over previous year's figures.

Quarterly growth fell as low as 5.6 percent in mid-2017 as the economy reeled from a shock cash ban that scrapped 86 percent of currency notes. "Growth in manufacturing (13.5 per cent) also indicates broad-based recovery of demand".

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Finance minister Arun Jaitley posted on Twitter, "India's GDP for the first quarter this year growing at 8.2% in otherwise an environment of global turmoil represents the potential of New India".

He said the country's growth rate might decline in the third and fourth quarters and be the same as that reported in the last fiscal. "Happy that the rate of growth has quickened, but look at the table once again".

In a dig at the preceding UPA government, he said the economy was in shambles when Modi took over but an unfazed NDA, the entire Cabinet, "single-mindedly" focussed on putting India back on track.

Pronab Sen, India's former chief statistician, described the GDP numbers as being on expected lines. While impressive growth performance in agriculture and construction is a welcome trend given the high labour intensity of these sectors, services recording a lower than average growth is an important development, Sen added. The favourable base effect this time around has prompted economists to caution that 8%-plus growth doesn't seem likely for the net three quarters.

"GDP at constant (2011-12) prices in Q1 of 2018-19 is estimated at Rs 33.74 lakh crore, as compared to Rs 31.18 lakh crore in Q1 of 2017-18, showing a growth rate of 8.2 percent".

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