The Indian economy slowed down in the April-June quarter, resulting in a three-year low as the impact of destocking by companies ahead of the roll-out of the Goods & Services Tax (GST) and long-lasting effects of demonetisation hurting growth. Data released by the Central Statistics Office showed that the economy grew 5.7 per cent in April-June, slower than the previous quarter's 6.1 per cent growth and lower than the 7.9 per cent expansion posted in the first quarter of 2016-17.
Finance Minister Arun Jaitley has vowed to take steps to revive growth in the quarter ahead. “Slowdown in GDP growth in the first quarter is a matter of concern. Global economy is improving faster than what we thought and that is a positive trend. The domestic public investment is certainly going to be quite high because the revenue trend seems to be positive,” he said. The June quarter growth is below China's 6.9 per cent expansion in the April-June quarter and puts pressure on policymakers to unveil measures to revive the economy.
“The subdued and weakened economic performance of the domestic economy indicates that the disruption caused by demonetisation has not run its course and GST implementation related disruption in business activity has further aggravated the economic vulnerability of the country,” Madan Sabnavis, chief economist at CARE Ratings said. DK Joshi, chief economist at ratings agency Crisil, said, “For fiscal 2018 as a whole, we are in the process of revising down of our GDP growth forecast down from 7.4 per cent stated earlier. That said, normal monsoon, softer interest rates and inflation, and pent-up demand (demand postponed due to the demonetisation) will support consumption growth. There will also be a mild push to consumption from budgetary announcements.”
