Finance Minister Arun Jaitley on Thursday lauded the economic growth, saying that the GDP growth at 6.3% indicates that “the impact of two structural changes — Demonetisation and the GST — are behind us”. The Finance Minister expressed hope that in coming quarters, the country can look for an upward trajectory. He further said that the most significant aspect of Q2’s positive result has been impacted by the growth in manufacturing.
While responding to a question on destocking, the Finance Minister said that since manufacturing has increased, it indicates that the trend of destocking and inventory drawdown has reversed. Arun Jaitley said that since March 2014, out of 13 quarters, India has clocked upwards of 7% eight times.
India’s GDP growth sharply rebound to 6.3% in fiscal second quarter July-September from a three-year low in the first quarter, as businesses sprung into economic activity ahead of a condensed festive season and accelerated production to build inventory after the implementation of GST.
A sharp bounce in manufacturing growth rate at 7% in July-September from 1.2% in the preceding quarter was among the primary drivers behind the second quarter GDP growth acceleration. On the other hand, farm growth slowed in second quarter to 1.7% from 2.3% in the preceding three-month period. Agricultural production in the second quarter was held up due to poor crop output, India’s Chief Statistician TCA Anant said.
Construction activity also recorded a decent expansion with a growth rate of 2.6% in July-September vs 2% in the previous quarter. Industrial activity also saw a spike with 5.8% growth rate in second quarter vs 1.6% in the first quarter. Electricity output growth at 7.6% vs 7% also supported economic growth.
Quarterly GVA for Q2 of 2017-18 for Trade, Hotels and Transport & Communication and Services related to broadcasting grew by 9.9% on-year. Mining and quarrying growth also picked up significantly, accelerating to 5.5% in second quarter from 0.7% in the previous quarter.