The economy has grown 7.7 per cent during January-March this year, its fastest pace in nearly two years, as it appeared to have emerged from the impact of demonetisation and roll out of the Goods and Services Tax. Latest numbers released by the government show that India was the fastest growing major economy, ahead of China, which reported a 6.8 per cent expansion in the March quarter, although there is a massive difference in the size of the two Asian economies. The economy clocked 6.7 per cent growth, lower than 7.1 per cent growth of 2016-17 during the full financial year of 2017 and18.
While manufacturing and farm sector were estimated to have expanded at a slower pace during the last financial year, it has services that boosted growth. Dharmakirti Joshi, chief economist at ratings agency CRISIL, said, “GDP growth at 7.7 per cent in the fourth quarter was driven by an 11.5 per cent surge in construction (over a weak base) and above trend growth in agriculture. It is heartening to see investments expand at 14.4 per cent. This is likely to be on account of government investments as the private corporate sector is still deleveraging and faces capacity overhang.”
The numbers provided a much-needed cheer to the government, which is bracing for a tough battle ahead given the spurt in oil prices which can not just impact its fiscal calculations but also put pressure on inflation. Piyush Goyal, who is officiating as Finance Minister, said, “GDP growth has been increasing continuously every quarter with growth of 7.7 per cent in Q4 of 2017-18. Shows that the economy is on the right track & set for even higher growth in the future.”
