The Indian economy is expected to grow at a slower pace in the current financial year due to weaker growth in the farm sector and in manufacturing.
First advance estimates released by the government’s Central Statistical Organisation peg GDP growth for 2017-18 at 6.5 percent compared to 7.1 percent last year. Growth in gross value added terms, which strips out the impact of indirect taxes and subsidies, is pegged at 6.1 this year, versus a revised 6.6 percent last fiscal.
Meanwhile, the Congress lashed out at the Modi government for the slowdown, asserting how the PM and Finance Minister have ignored economic wisdom, and "dealt a catastrophic blow to India's growth story as proved by the latest GDP estimates".
The first advance estimates released by the CSO are used by the government to prepare the budget for the upcoming financial year. The estimates are prepared using actual sectoral data available for about seven months of the year, along with other indicators such as financial results of the private corporate firms.
In addition, government spending linked segments like ‘public administration, defence and other services’ also saw a slowdown in the second quarter of fiscal 2018, based on data released by the CSO in November.
GVA growth in the first and second quarters of the year stood at 5.6 percent and 6.1 percent, respectively.
This is in line with the forecasts put out by the Reserve Bank of India, which expects full-year GVA growth to settle at 6.7 percent this year. Growth in the third and fourth quarters is forecast at 7 percent and 7.8 percent, respectively, RBI executive director Michael Patra said at a press conference on 6 December.
A statement issued by Randeep Surjewala, Communications in-charge, All India Congress Committee, blamed demonetisation and the implementation of GST for the economy's downturn.
(With inputs from BloombergQuint)
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