New Delhi, May 31 Robust performance by manufacturing, construction and service sectors and good farm output pushed the India's January-March 2018 GDP growth to a seven-quarter high of 7.7 per cent, helping it retain the fastest growing major economy tag, government data showed today.
"GDP at 2011-12 prices in the fourth quarter (Q4) of financial year 2017-18 registered growth rate of 7.7 per cent as against 5.6 per cent, 6.3 per cent and 7 per cent respectively, in the first three quarters, Q1, Q2 and Q3 of 2017-18, a statement by Ministry of Statistics and Programme Implementation said. RBI in its April 2018 policy review said that the GDP growth for India is forecasted to increase to 7.4% in FY19, helped by revival in investment activity and pick-up in global growth-which should encourage exports and boost fresh investments", he said.
"GVA growth also escalated to 7.6% y-o-y from 6.6% in Q4, primarily driven by agriculture and industry".
Real GVA (at basic constant 2011-12 prices for 2017-18) is now estimated at Rs 119.76 lakh crore, showing a growth rate of 6.5 per cent over first revised estimates of GVA for 2016-17 of Rs 112.48 lakh crore.
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The role of fiscal policy was also clear in government consumption data that saw a growth of 16.8 percent year-on-year. It may be noted that economists had pegged the figure at 7.3 % but as stated earlier, rapid growth in Agriculture, manufacturing and construction sector contributed significantly to the latest figures.
The research also indicated that the Goods and Services Tax (GST) may hamper the growth rate progress for a few quarters, however saying that the drawbacks will gradually moderate. His government launched a nationwide goods and services tax (GST) but its introduction was botched, almost scuttling India's growth prospects in the near term. Possibly, the biggest risk could be rising crude oil prices, which this month hit $80 a barrel, their highest since 2014.
The almost $1.7 trillion formal banking sector, which is coping with non-performing assets (NPAs) and emergence of fraud scandals, is worry point in the economy. "We should however be wary of the headwinds the economy faces in the coming quarters from higher crude prices feeding into inflation and rising inflation expectations". India meets 80 per cent of its oil needs from imports. Higher oil prices have already pressured the rupee, near a record low last week and Asia's worst performer.
"GDP and GVA growth for FY18 came in at 6.7% and 6.5% respectively, compared to CSO's GVA and GDP forecast for FY18 at 6.4% and 6.6% respectively".