GDP rises 7.3% in Q2; uncertainty looms due to demonetisationLD GDP 2 LAST Talking about challenges, Subramanian said investment was

Books Wednesday 30/November/2016 20:15 PM
By: Times News Service

New Delhi, Nov 30 (PTI) India remained the fastest
growing major economy with its GDP accelerating to 7.3 per
cent in the September quarter, pushed mainly by farm output,
although the momentum may be hit in the coming months by the
impact of demonetisation.
The Gross Domestic Product (GDP) or national income which
rose from 7.1 per cent in the previous quarter is however
lower than 7.6 per cent recorded in the same period last year.
India overtook China in economic growth rate in 2015, and
continues to be the world's fastest growing large economy.
Meanwhile, monthly macro-economic data on performance of
eight infrastructure sectors showed six-month high growth
of 6.6 per cent in October.
According to the data released on Wednesday by the
Central Statistics Office (CSO), the Gross Value Added (GVA),
which is estimated at the basic price, growth decelerated to
7.1 per cent as compared 7.3 per cent both in the previous as
well as the year ago period.
The data revealed that over 7 per cent growth was recored
by 'public administration, defence and other services',
'financial, insurance, real estate and professional services',
'manufacturing' and 'trade, hotels and transport and
communication and services related to broadcasting'.
Growth rates in agriculture, forestry and fishing; mining
and quarrying; electricity, gas, water supply and other
utility services; and construction were at 3.3 per cent,
(-)1.5 per cent, 3.5 per cent and 3.5 per cent respectively.
This compares with 2 per cent, 5 per cent, 7.5 per cent and
0.8 per cent year ago period.
Manufacturing slowed to 7.1 per cent from 9.2 per cent in
the year-ago period.
On the impact of demonetisation of old Rs 500/1000 notes
on growth prospects, Chief Statistician T C A Anant said
statements made by experts on the adverse impact of
demonetisation is made without any data.
"People make assumptions and based on that they make
statements. Once the data comes in, I will make a statement,"
he said at a press conference.
Chief Economic Adviser Arvind Subramanian said: "What we
have for first half are actual numbers. It shows good
consistent performance. For second half we will have to see,
there are a lot of uncertainty. We have to analyse it before
we say something".
What is worrying however is the decline in Gross Fixed
Capital Formation (GFCF) an indicator of investment.
GFCF growth rates at current and constant prices are
estimated at (-)3.2 per cent and (-)5.6 per cent during Q2 of
2016-17 as compared to 7.5 per cent and 9.7 per cent during Q2
of 2015-16. MORE PTI NKD
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down substantially in the second quarter and that is something
that needs to be watched.
Referring to the impact of demonetisation of 500 and 1000
rupee notes by the government earlier this month, CII Director
General Chandrajit Banerjee said that it would be a "temporary
setback" to growth in the coming quarter.
As per CSO, GDP at constant (2011-12) prices in the
second quarter of 2016-17 is estimated at Rs 29.63 lakh crore,
as against Rs 27.62 lakh crore in the year-ago period.
The quarterly GVA at basic price at constant (2011-12)
prices for July-September is estimated at Rs 27.33 lakh crore,
as against Rs 25.52 lakh crore year-on-year.
Government Final Consumption Expenditure (GFCE) at
current prices is estimated at Rs 5.15 lakh crore for the
second quarter as against Rs 4.27 lakh crore year ago.
At constant (2011-2012) prices, the GFCE is estimated at
Rs 3.84 lakh crore as against Rs 3.33 lakh crore.
In terms of GDP, the rates of GFCE at current and
constant prices during the second quarter are estimated at
14.1 per cent and 13 per cent respectively, as against the
corresponding rate of 13.1 per cent and 12.1 per cent in the
same period of 2015-16.
Chief Statistician Anant also informed that the 'advance
estimates' for national accounts data for the current fiscal
will be released on January 7, a month in advance.
The data release date is being advanced as government
would be presenting Budget a month ahead of the usual practice
of unveiling it on last working day of February.
The data on eight core infrastructure sector recorded a
growth rate of 6.6 per cent in October on the back of
impressive performance by steel and refinery products.
However, growth rate of power generation, fertiliser
production and cement output fell considerably on year-on-year
basis. Coal production continued to fall for the third
straight month.
The core infrastructure sectors -- coal, crude oil,
natural gas, refinery products, fertilisers, steel, cement and
electricity -- showed 3.8 per cent in October last year.
Core sector contributes 38 per cent to the total
industrial production. PTI NKD
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