In a major boost to the government ahead of the 2019 general elections, India's economy accelerated at its fastest in seven quarters in the January-March period, thanks to the strong performance in construction, manufacturing and public services.
The Gross Domestic Product (GDP) rose to an astounding 7.7 per cent in the fourth quarter, retaining India's ranking as the world's fastest-growing economy, outpacing its South-Asian neighbour China by nearly a percentage point.
The economy grew at the highest rate since September quarter of FY17, ahead of the demonetisation drive that began in November 2016.
"GDP growth has been increasing continuously every quarter with growth of 7.7 per cent in Q4 of 2017-18. Shows that the economy is on the right track and set for even higher growth in the future", tweeted Piyush Goyal who is handling the Finance portfolio till Arun Jaitley recovers from a medical procedure.
GDP growth has been increasing continuously every quarter with growth of 7.7% in Q4 of 2017-18. Shows that the economy is on the right track & set for even higher growth in the future. This is the #SahiVikas under leadership of PM @NarendraModi ji & @ArunJaitley ji— Piyush Goyal (@PiyushGoyal) May 31, 2018
Finance secretary Hasmukh Adhia tweeted that the government’s economic policies were bearing fruit.
“The constant increasing trend of quarterly GDP numbers in the four quarters of 2017-18 at 5.6%, 6.3%, 7% and 7.7% indicates that the structural measures of reforms undertaken by the government are now bringing rich dividends in the form of higher GDP growth rate,” he said on Twitter.
1/2 The constant increasing trend of quarterly GDP numbers in the Four-Quarters of 2017-18 at 5.6%, 6.3%, 7% and 7.7% indicates that the structural measures of reforms undertaken by Government is now bringing rich dividends in the form of higher GDP Growth Rate.— Dr Hasmukh Adhia (@adhia03) May 31, 2018
Growth in the agriculture, manufacturing and construction sectors stood at 4.5%, 9.1% and 11.5%, respectively in the fourth quarter, with construction benefiting from a strong base effect of 3.9% negative growth in the year-earlier period.
Trade, hotels, transportation, communication and services grew at 8% during the fiscal compared with 7.2% growth in FY17. The pickup in credit offtake helped financial services grow 6.6%, faster than 6% growth in the previous year.
Public administration, defence and other services grew at 10% on an annual basis, marginally lower than 10.7% growth in the previous year.
“What is most noticeable is the increase in the growth rate of GVA of the manufacturing sector in the last two quarters of 2017-18 at 8.5% and 9.1% at a constant price,” Adhia said in another tweet. “We would like to believe that GST has given a big boost to the industrial sector.”
2/2What is most noticeable is the increase in the Growth Rate of GVA of Manufacturing Sector in the last two Quarters of 2017-18 at 8.5% and 9.1% at constant price. We would like to believe that GST has given a big boost to the Industrial Sector.— Dr Hasmukh Adhia (@adhia03) May 31, 2018
Meanwhile, the growth rate for 2017-18 was higher than the government's first and second advance estimates — at 6.5 per cent and 6.6 per cent — and in sync with what the International Monetary Fund, the World Bank and the Economic Survey had estimated. This is the last piece of macroeconomic data before the Reserve Bank of India reviews the monetary policy in June.
On the other hand, China's economy grew by 6.8 per cent in the quarter that ended on March despite Beijing's ongoing trade war with the United States as well as the mounting debt concerns.
(With inputs from agencies)