NEW DELHI: The country’s GDP (gross domestic product) growth slowed to 7.1 per cent in the September quarter (2018-19) from 8.2 per cent in the June quarter, government data showed on Friday. The GDP growth rate came at 6.3 per cent in the same period last year.
The gross value added (GVA) growth rate for the second quarter came at 6.9 per cent from 8 per cent in Q1. Despite the slow GDP growth, the country still remained ahead of China to retain the world’s fastest growing economy tag.
The GVA gives a picture of the state of economic activity from the producers’ side or supply side, as opposed to GDP which gives the picture from the consumers’ side or demand perspective.
The data showed that mining and quarrying output has declined by 2.4 per cent in the quarter from a growth of 6.9 per cent in year ago period. However, the manufacturing activities expanded at the rate of 7.4 per cent in the quarter under review up from 7.1 per cent in the year ago quarter.
The construction sector too showed an improvement by recording a growth of 7.8 per cent as against 3.1 per cent earlier. And, the farm sector too grew at a higher rate of 3.8 per cent in the quarter as against 2.6 per cent a year ago.
The growth rate came below expectations as a Reuters poll had projected that the Q2 figures may slow down to 7.4 per cent. A majority of analysts had expected a slip from the surprisingly high growth figure of 8.2 per cent, achieved in the first quarter.
Growth will continue to be under pressure for the remainder of the current fiscal as well and the FY19 growth number will come at 7.1 per cent, economists at private sector lender Axis Bank said in the report.
In another set of data released by the government, the growth of eight infrastructure sectors accelerated to 4.8 per cent in October from 4.3 per cent in September.
‘Still, the highest growth rate in the world’
Reacting to the GDP numbers, economic affairs secretary Subhash Chandra Garg said, “7.1 per cent GDP growth for September quarter “seems disappointing”, but growth rate for the first six months of the fiscal is robust and healthy.”
“GDP growth for second quarter 2018-19 at 7.1 per cent seems disappointing. Manufacturing growth at 7.4 per cent and agriculture growth at 3.8% is steady. Construction at 6.8 per cent and mining at -2.4 per cent reflect monsoon months deceleration,” Garg tweeted.
GDP growth for second quarter 2018-19 at 7.1% seems disappointing. Manufacturing growth at 7.4% and agriculture gro… https://t.co/9z3l9y9z9P
— Subhash Chandra Garg (@SecretaryDEA) 1543581600000
The growth during April-September stood at 7.6 per cent, which is “quite robust and healthy”, he said. “Still, the highest growth rate in the world”.
First half GDP growth is at 7.6% and is quite robust and healthy. Still, the highest growth rate in the World.
— Subhash Chandra Garg (@SecretaryDEA) 1543582740000
The second quarter growth of 7.1 per cent keeps India ahead of China, which had expanded at the rate of 6.5 per cent in the July-September period this year.
(With inputs from agencies)