GDP grew 6.3 per cent in July-September, its fastest pace in three quarters
Highlights
- GDP grew at 6.3% for the July-Septmeber quarter
- Rise ends 5-quarter decline streak, Jaitley credits manufacturing growth
- Hopefully in coming quarters can look for an upwards trajectory: Jaitley
The rebound in GDP growth in the quarter ending September marks the reversal of the economy's downward slide over the last five quarters, Finance Minister Arun Jaitley said on Thursday evening, saying the significant part of data released on Thursday is the growth in manufacturing.
"It indicates that perhaps the impact of two very significant structural reforms - demonetisation and GST - is behind us and hopefully in coming quarters we can look for an upwards trajectory," Mr Jaitley said.
In really good news for the BJP-led government ahead of crucial assembly elections in Gujarat starting next week, data showed on Thursday that
Gross Domestic Product (GDP) grew 6.3 per cent in July-September, its fastest pace in three quarters, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of national sales tax GST.
Economists said the economy has also broadly moved past the disruptions encountered after the last year's shock ban on high value notes.
GDP growth fell to a three-year-low of 5.7 per cent in the last quarter ending June, and opposition parties blamed the economic slowdown on the government's two mega policies notes ban and what they called a hasty rollout of the GST. Congress vice president Rahul Gandhi has based the meat of his Gujarat campaign around the government's economic policies, alleging that GST has brought small businesses to their knees.
Prime Minister Narendra Modi and Arun Jaitley have insisted that the June quarter fall in growth was only a blip and that both GST and demonetisation are important structural reforms that will bring long term benefits.
Former finance minister and Congress leader P Chidambaram said the GDP growth rate is a pause in the declining trend and one should wait for the next three-four quarters before drawing a definite conclusion.
"Happy that the July-Sep quarter has registered a growth rate of 6.3%. This a pause in the declining trend of the last five quarters... But we cannot say now whether this will mark an upward trend in the growth rate. We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion," he said in a series of tweets.
The manufacturing sector grew at 7 per cent in the September quarter compared with 1.2 percent the previous quarter, driving the recovery. In July-September, auto sales, manufacturing, construction, electricity generation grew more quickly than in the previous quarter.
On November 17, ratings agency Moody's upgraded India's sovereign credit rating for the first time in nearly 14 years, saying continued progress on economic and institutional reforms would boost its growth potential.
The agency expects the economy to grow 6.7 per cent in the fiscal year ending March 31, and 7.5 per cent the following year.