Today is where we can find one good news and one bad news for India. India’s Gross Domestic Product (GDP) growth for quarter 2 ending September stood at 6.3 per cent. Pulled down by sluggish manufacturing, growth during the first quarter of this financial year fell to 5.7 per cent. The previous low of 4.6 per cent was recorded in January-March 2014. (It was 7.5 per cent in the September quarter of 2016-17). According to Central Statistics Office (CSO) data, the economic activities that registered growth of over 6 per cent in the second quarter are manufacturing, electricity, gas, water supply, other utility services and trade, hotels, transport and communication, and services related to broadcasting.
The agriculture, forestry and fishing sector is estimated to have grown by 1.7 per cent, mining and quarrying by 5.5 percent, and construction by 2.6 percent. The financial, insurance, real estate, and professional services are estimated to have grown by 5.7 percent, public administration, defense, and other services are by 6 percent, and manufacturing by 7 percent. Growth estimates for electricity, electricity, gas, and water supply stood at 7.6 percent and trade hotels, transport, and communication are at 9.9 percent. All these are responsible for growth in GDP.
On the other hand, data released by the Controller General of Accounts showed that the country’s fiscal deficit had reached 96.1 per cent of the budgeted target in October-end. This was in stark contrast to the 79.3 per cent of the target in the same period of 2016-17. Lower revenue realization and higher expenditure by the government were cited as among the major reasons behind this. Ahead of the GDP data release, the benchmark BSE Sensex collapsed 450 points to close at 33149.35, and Nifty also lost points to end at 10226.55. Any how the bounce back in economy was widely expected as there were clear signs of the businesses coming out of the slowdown caused by demonetization and the roll out of GST. Hope the recovery in GDP will improve other aspects as well. Why not?