IN­DIA RE­GAINS FASTEST GROW­ING ECON­OMY TAG

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In­dia has re­gained its sta­tus as the world's fastest grow­ing ma­jor econ­omy af­ter it clocked 7.2 per cent growth in the Oc­to­berDe­cem­ber quar­ter, sur­pass­ing China for the first time in a year as gov­ern­ment spend­ing, man­u­fac­tur­ing and ser­vices all picked up. The 7.2 per cent ex­pan­sion by the Asia's third-largest econ­omy, its fastest in five quar­ters, beat China's 6.8 per cent. For the full 2017-18 fis­cal (April 2017 to March 2018), GDP growth has now been pegged at 6.6 per cent as against 6.5 per cent fore­cast ear­lier and 7.1 per cent growth achieved in 2016-17. Be­sides, the data for eight core in­fra­struc­ture sec­tors in­clud­ing coal, steel, ce­ment and pe­tro­leum, showed im­proved growth of 6.7 per cent for Jan­uary, up from 3.4 per cent in same month a year ago. The fi­nance min­istry said that the data in­di­cate a broad-based and sig­nif­i­cant ac­cel­er­a­tion of real eco­nomic ac­tiv­ity as pro­jected in the Eco­nomic Sur­vey. "Ro­bust growth in man­u­fac­tur­ing and sig­nif­i­cant ac­cel­er­a­tion in con­struc­tion mark a turn­around in the coun­try’s eco­nomic growth mo­men­tum," the min­istry said in a state­ment. Ac­cord­ing to the chair­man of EAC to PM, Bibek De­broy, the econ­omy is on the right track to ac­cel­er­ate and the cur­rent ex­pan­sion in the growth rate in a re­flec­tion of the re­forms ini­ti­ated by the gov­ern­ment. The growth will pick up fur­ther in the up­com­ing quar­ter driven by the gov­ern­ment's com­mit­ment to im­ple­ment struc­tural re­forms and aided by higher growth in the in­dus­trial and ser­vices sec­tor as well as spend­ing by the Cen­tre. "In­dia is on the right path to be­come one of the fastest ma­jor economies in the World sur­pass­ing China," De­broy said. The growth for the sec­ond quar­ter (July-Septem­ber) has been re­vised up­wards to 6.5 per cent, from 6.3 per cent es­ti­mated ear­lier by the CSO. The pre­vi­ous high was recorded at 7.5 per cent in the Ju­lySeptem­ber quar­ter of 2016-17. The CSO said that the real GDP or Gross Do­mes­tic Prod­uct (GDP) at con­stant (2011-12) prices in 2017- 18 is likely to be Rs 130.04 lakh crore, as against the first re­vised es­ti­mate for 2016-17 of Rs 121.96 lakh crore, re­leased on Jan­uary 31. CII Di­rec­tor Gen­eral Chan­dra­jit Ban­er­jee said: "The sig­nif­i­cant im­prove­ment in GDP growth, which has ac­cel­er­ated to a ro­bust 7.2 per cent in the third quar­ter as against 6.5 per cent in the pre­vi­ous quar­ter is note­wor­thy and strength­ens the per­cep­tion that the In­dian econ­omy is at the thresh­old of a sus­tained re­bound in growth." The gross val­ued added (GVA) for man­u­fac­tur­ing in the quar­ter un­der re­view grew at 8.9 per cent higher than 6.9 per cent in the pre­vi­ous quar­ter. Sim­i­larly, the farm sec­tor GVA grew at 4.1 per cent com­pared to 2.7 per cent in the pre­vi­ous quar­ter. The con­struc­tion sec­tor recorded a growth of 6.8 per cent, higher than 2.8 per cent in pre­vi­ous quar­ter. The ser­vices seg­ment in­clud­ing fi­nan­cial ser­vices grew at rate of 6.7 per cent up from 6.4 per cent in pre­vi­ous quar­ter. As per the data, eight core sec­tors -- coal, crude oil, nat­u­ral gas, re­fin­ery prod­ucts, fer­tilis­ers, steel, ce­ment and elec­tric­ity -- had grown by 4.2 per cent in De­cem­ber, and 7.4 per cent in Novem­ber of the cur­rent fi­nan­cial year. Pe­tro­leum re­fin­ery pro­duc­tion spurted 11 per cent in Jan­uary against a flat out­put in the year-ago month. Ce­ment out­put jumped 20.7 per cent in the month against 13.3 per cent con­trac­tion in the year ago pe­riod. Elec­tric­ity gen­er­a­tion growth also fast paced to 8.2 per cent in Jan­uary against 5.2 per cent in Jan­uary 2017. Coal sec­tor out­put im­proved by 3 per cent and steel pro­duc­tion by 3.7 per cent in Jan­uary 2018. Crude oil pro­duc­tion how­ever dropped 3.2 per cent, fer­til­iz­ers by 1.6 per cent and nat­u­ral gas by 1 per cent in the month un­der re­view. Cu­mu­la­tively, the growth in the eight core sec­tors dur­ing AprilJan­uary this fis­cal slowed to 4.3 per cent as against 5.1 per cent in the same pe­riod last fis­cal. The growth in key sec­tors will have im­pli­ca­tions for the In­dex of In­dus­trial Pro­duc­tion (IIP) as these eight seg­ments ac­count for about 41 per cent of the to­tal fac­tory out­put.

Bibek De­broy, Econ­o­mist

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