1. Setback for Modi: India loses world’s fastest growing economy tag as GDP grows slowest in 2 years

Setback for Modi: India loses world’s fastest growing economy tag as GDP grows slowest in 2 years

India's economic growth unexpectedly slowed to its lowest in more than two years, dragged down by construction, manufacturing and trade services, and stripping the country of its status as the world's fastest growing major economy.

By: | New Delhi | Published: May 31, 2017 7:33 PM
narendra modi, india gdp, gdp growth, trade services, PhillipCapital, YES Bank, RBI,  Shubhada Rao, gdp data Annual gross domestic product (GDP) growth for the January-March period came in at 6.1 percent, compared with a provisional 7.0 percent in the previous quarter, government data showed on Wednesday. (PTI)

India’s economic growth unexpectedly slowed to its lowest in more than two years, dragged down by construction, manufacturing and trade services, and stripping the country of its status as the world’s fastest growing major economy.

Annual gross domestic product (GDP) growth for the January-March period came in at 6.1 percent, compared with a provisional 7.0 percent in the previous quarter, government data showed on Wednesday. The expansion was much slower than the 7.1 percent forecast by economists in a Reuters poll. It was also lower than China’s growth of 6.9 percent for the first three months of 2017.

“This data is closer to the ground reality than the previous ones,” said Anjali Verma, an economist at PhillipCapital in Mumbai. The figure is the lowest since the December quarter in 2014, which registered 6.0 percent growth, Reuters data shows.

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For the 2016/17 fiscal year ending in March, New Delhi reported GDP growth of 7.1 percent, slower than an 8.0 percent expansion a year ago. The weak GDP data will be a setback for Prime Minister Narendra Modi, who completed three years in office last week.

Wednesday’s figures, however, have not changed expectations for monetary policy. Analysts still expect the Reserve Bank of India (RBI) to keep interest rates on hold. “We continue to expect the RBI to remain on pause, with any rate hikes ruled out,” said Shubhada Rao, chief economist at YES Bank.

Construction activity contracted 3.7 percent year-on-year in the March quarter compared with a 3.4 percent growth in the prior quarter. Manufacturing grew 5.3 percent in the last quarter from a year ago, slower than an annual rise of 8.2 percent in the December quarter.

Annual growth in trade, hotels and transport services slowed to 6.5 percent in the January-March period from 8.3 percent a quarter ago.

  1. H
    hassan
    Jun 3, 2017 at 5:13 pm
    Modi did not prove to be a good omen for business in India but only good omen for cows...cow protection is the top agenda of the government forgetting some important things like sinking econmoy...
    Reply
    1. D
      Dr Navin
      Jun 2, 2017 at 1:40 pm
      PM Modi has done a good job but he has been badly let down by technology minister ravishankar prasad and finmin/defence minster Jaitely. In technology and telecom there is nothing happening. why are we slow on 5g rollout? What is the follow thru action south east asia trade pact? There is absolutely no action on smart cities. This is despite the fact the top 6 tech firms have in excess of Rs 80,000 crores cash. So Mr Prasad should be sacked immediately. Jaitly is even worse less said the better about gst, bank npa. and much much more. Jaitely has to sacked from defence and finmin. He can be given commerce minister and sita should be given sports as she has been doing nothing as commerce minster or she can join maneka hi and protect street dogs. .
      Reply
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        Mahesh
        Jun 2, 2017 at 11:50 am
        Q4 results itself does not mean GDP result of that entire year. Currently, average GDP of all the 4 quarters is 7.1 for the entire year 2016-17 and the GDP of our next compe or i.e China's GDP for 2016-17 is 6.5 which is its 25 year lowest rate. Therefore growth may be less but we still retain our position as the fastest growing economy of the world unlike what author says. We need to agree that our growth rate has dropped from 8.0 in 2015-16 to 7.1 in 2016-17, due to demonitization effect. Such things happen when harsh and revolutionary steps like demonitization and GST are taken towards bright future. Despite current growth dent IMF, the international UN organization predicts India's GDP growth to be 7.2 in 2016-17 and 7.7 In 2018-19 due the emergence of GST. Moreover, GST is estimated to boost economy by 2 forward growth every year. So dear readers there is nothing to fear about, India has the bright future. So we should not go by the sensationalism created by the authors.
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        1. R
          roby mani
          Jun 1, 2017 at 5:57 pm
          Finally truth is out. Economy has slowed and all Guruswamys, gaw samis along with Jutley and Modis stand exposed. Nothing solid to show case, after a long period of 3 years except some gas. High time the news channels stop supporting such stupid fellows.
          Reply
          1. S
            Sumanth
            Jun 2, 2017 at 8:05 am
            For 70 years every one was silent Now every one wants a miracle Defence expenditure could have been half of what it is had they not given 550 million to stan in 1947 Atlest 1million refugees who came from stan leaving everything could have been given homes to live A strict stand could have been taken on Kashmir then....problem since 70yrs Conversely with that kind of money we could have become stronger than china by now in defence We are into apea t politics Majority is unfortunately is s bing into hands of fanatics Perhaps it is only in our soil one can pelt stones fly stan flags claim human rights Also say they are patriots They can comment on Army generals actions Atlest no scams like of Lallus 2gs etc Persons who save tigers are environmentally friendly Persons who save stray dogs even if it bites & troubles children are kind hearted Person speaking for cows are fundamentalist Not nations which ban liquor or pork What a logic Let's wait for just 2yrs
            Reply
          2. V
            Vinodh
            Jun 1, 2017 at 12:18 pm
            If the calculation is done by old method, the GDP is close the two lowest numbers recorded in the history of independant India. Those were during Vajpayee's period.
            Reply
            1. S
              Sunder Paul
              Jun 1, 2017 at 10:58 am
              When the concern of Indian rulers is to make India Hindu Rastra, our economy responds in its own tune. Cattle breeders are becoming our political (public) leaders. We are going COWARD not FORWARD.
              Reply
              1. R
                Ramesh Shekhar
                Jun 1, 2017 at 12:49 pm
                Everyone should follow the Great West Bengal way of Economics that it has followed for the past 50 years. One should also follow the Lal Jhanda Zindabad and Cholbe Na, Cholbe Na slogans of West Bengal to "develop" as much as West Bengal is developed today. One should carry out deindustrialization of the entire state, close down factories by doing continuous strikes and hartals. One should burn the CEO and MD of companies by putting a rubber tyre around their neck and lighting it alive. One should drive out industrialists like Ratan Tata out of the state and close their factories. One should have a debt burden of Rs. 2,00,000 Crore (Rs. 20,00,00,00,00,000), and not be able to pay even the interest, and then say to the lender do whatever you want to, we will not pay your debt. One should survive on other state's money and resources. After all this, One should lecture INDIA and other states that their economic policies are bad and driving the Indian economy downwards.
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                Nizamuddin Ansari
                May 31, 2017 at 9:08 pm
                there are only few tv news channel and very few news papers who dares to say TRUTH. congratulations to all the patriotic news agencies. and those news papers and tv channels who are appreciating MODI GOVERNMENT, they are really really DESHDROHIS Such media is dragging the country to pit
                Reply
                1. P
                  Pranay Teja
                  Jun 1, 2017 at 11:21 am
                  By deshdrohi, you mean non Muslims? Because that is how a Muslim thinks now a days. GDP was the highest in modi government rule and now it is lowest in his rule of 3 years,accountably 2 years. So he was responsible for the fastest growing economy. But because of demonetisation, there is short term effects to be taken into account, that is found to be 5 lakh crore less in our economy. Trust me, this is the minimum effect. It was expected to be more less. So if you are a Muslim community supporter, then I can understand your problem 😒.. But if you are a secular citizen of India, then you would already have understood the efforts modi has done to do good. You can go ahead and have Congress to power again. They will you in the , like they did and doing already. Take an example of largest coal allocation scam during 2004-2009. If you are not talking about it, man I don't understand why??? Jai hind.. Bharat Mata ki Jai..
                  Reply
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