Rise in GDP growth rate pause in declining trend: Chidambaram

Rise in GDP growth rate pause in declining trend: Chidambaram

The figure for the previous quarter, April-June, had hit a three-year low of 5.7 per cent. "Quarterly GDP growth accelerates to 6.3 per cent versus 5.7 per cent in the previous quarter".

Infrastructure output grew 4.7% in October from a year ago, driven by higher refinery production.

He further said Q2 economic growth is also far below the potential of a well-managed Indian economy. Manufacturing grew 7% while agriculture growth was 1.7%, down from 2.3% in the trailing quarter.

Congress leader P Chidambaram today welcomed the rise in India's GDP growth rate but on a cautious note, saying it is a pause in the declining trend and one should wait for the next three-four quarters before drawing a definite conclusion.

This prompted Finance Minister Arun Jaitley to say that the impact of demonetisation and the GST were behind us.

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He said the tax collection data is still being updated and current calculation was made on reported tax collections.

Real GVA growth has shown a similar increase from 5.6 percent in the first quarter to 6.1 percent in the second quarter, despite a deceleration in agricultural growth from 2.3 percent in the first quarter to 1.7 percent in the second. But we can not say now whether this will mark an upward trend in the growth rate. "After the five quarters of growth decline, we see reversal of GDP in the second quarter", he said.

"This coupled with strong fundamentals hold promise for a great future of Indian economy under the leadership of Narendra Modi".

Earlier in the day, the stock market saw a sharp slump, dropping over 450 points. Reliance Industries, SBI and ICICI bank were some of the heavyweights who recorded loses. The data also showed that the gross domestic product or GDP numbers expanded due to accelerated growth of manufacturing sector in the country.

The bounce back in economy was widely expected as there were clear signs of the businesses coming out of the slowdown caused by demonetisation and the roll out of GST, said media reports. It was 7.5 per cent in the September quarter of 2016-17. "It's possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later...inventory accumulation effect may persist in the third quarter as well", he explained. However, it can not be said now whether this will mark an upward trend in the growth rate.

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