GDP growth rebounds to 6.3% in second quarter

NEW DELHI: India’s economic growth quickened to 6.3% in the September quarter after five quarters of consecutive decline, sliding to a three-year-low of 5.7% in the June quarter, as manufacturing picked up due to restocking of ware houses by companies after the temporary disruption caused-by-the-roll-out-of-the goods and services tax (GST).

While agriculture decelerated to 1.7% in the September quarter from 2.3% in the June quarter due to unfavourable kharif output, manufacturing grew to 7% from 1.2% during the same period. Mining output and electricity generation also grew faster than the first quarter at 5.5% and 7.6% respectively. However, most of

ECONOMY RECOVERS FROM 5.7% FIGURE IN PREVIOUS QUARTER, DRIVEN BY MANUFACTURING

the services sector slowed down, including public expenditure which slowed 6% growth in the second quarter against 9.5% in the first.

Finance minister Arun Jaitley said the September quarter marks the reversal of the downward trend in economic growth. “This indicates that perhaps the impact of the two structural reforms --demonetisation and GST- is behind us and hopefully, we can look for an upward trajectory in the third and the fourth quarter,” he added.

Former finance minister P Chidambaram, however, said this was a pause in the declining trend of economic growth. “We can not say now whether this will mark an upward trend in the growth rate. We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion. 6.3% is far below the promise of the Modi government and far below the potential of a well-managed Indian economy,” he tweeted.

While the demonetisation of high value currencies in November last year was expected to have disrupted supply chains in the informal economy, uncertainties surrounding GST implementation forced companies to cut down production and stocks, leading to a di pin manufacturing activity in the June quarter.

Chief statistician of India TCA Ana nth said the reversal in manufacturing in the September quarter is mostly to meet the additional demand for the festive season.