India's growth surges to 8.2%

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Q1FY19 GDP beats estimates, grows at 8.2 percent

India's economy has recorded its fastest quarterly growth in two years, even as the value of the rupee continues to fall.

New Delhi, Aug 31 India's economy grew at 2-year high of 8.2 per cent in the April-June quarter of 2018-19 on strong performance of manufacturing and agriculture sectors, increasing its lead over China to remain the world's fastest growing major economy.

Commenting on the April-June quarter results, Economic Affairs Secretary SC Garg said that India's economy was on a steady growth path and added that the fiscal deficit will not exceed 3.3 per cent of the GDP in 2018-19.

This is the highest GDP growth since the second quarter (Q2) of the financial year 2014-15 when the GDP grew at 8.4 per cent. Agricultural growth, which mainly captures the 2017-18 Rabi season activity, increased from 3% to 5.3% between Q1 2019 and Q1 2018. For the first three months of 2018, India reported 7.7 percent annual growth, the fastest in almost two years.

GDP growth for the April-June quarter past year (FY'18) came in at 5.6% (revised downward from 5.7%). As tailwinds from a favourable base effect weaken from the next quarter onwards, GDP growth is expected to come down slightly, he said. Since then there has been a steady upward trend - Q1 (2017-18) - 5.6%, Q2 (2017-18) - 6.3%, Q3 (2017-18) - 7.0% and Q4 (2017-18) - 7.7 %. However, we are disappointed with the muted growth seen in services components.

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The economic activities which registered growth rate of over 7 per cent in Q1 of 2018-19 included "manufacturing, electricity, gas, water supply and other utility services", "construction" and "public administration, defence and other services".

The index of industrial production (IIP) - the broadest approximation to measure activity across India's factories - has grown at 5.2 percent during April-June 2018 compared with 1.9 percent in the same period past year. The manufacturing GVA grew by robust 13.5 percent in Q1 as against a contraction of 1.8 percent in a corresponding quarter of the previous year and 9.1 percent in the preceding year. "Q1 growth rate is based on the lowest base (5.6) in the last 8 quarters", he tweeted.

Gross Value Added (GVA) for the given quarter rose by 8 percent as against 5.6 percent in the same quarter of past year. "An encouraging development is the slow but steady rise in private consumption spending growth".

Of the 28 banks that reported their financial results for the quarter ended March 2018, 13 suffered losses. Almost 5.3 crore individuals filed their returns until Friday evening, the last date, showing good compliance.

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