Live: As India’s Q1 GDP growth slows to 3-year low of 5.7%, P Chidambaram terms slide in economy an explosive cocktail

The Central Statistics Office (CSO) today released the Gross Domestic Product (GDP) figures for the first quarter (April-June) of financial year 2017-18. India’s Q1 GDP growth fell to 5.7%. Finance Minister Arun Jaitley said, “GDP data throws up challenges for the economy.”

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The Central Statistics Office (CSO) will today release the Gross Domestic Product (GDP) figures for the first quarter (April-June) of financial year 2017-18. (Reuters)

The Central Statistics Office (CSO) today released the Gross Domestic Product (GDP) figures for the first quarter (April-June) of financial year 2017-18. India’s Q1 GDP growth fell to 5.7%. Finance Minister Arun Jaitley while addressing a press conference said, “GDP data throws up challenges for the economy.” He said the government will improve and revive growth figures. Following demonetisation, the economy is reeling under pressure and still seems to be desperately trying to recover from the note ban. The economy clocked a 6.1 per cent growth rate in the January–March period — its lowest pace of growth in the past nine quarters.

Track here for live updates here:

10: 10 PM: The slide in economy continues. Slow growth, low investment and no jobs. An explosive cocktail, former Finance Minister said further in his tweet.

10: 07 PM: “GDP and GVA figures are more evidence of Dr Manmohan Singh’s indictment of ‘monumental mismanagement’,” tweeted former FM P Chidambaram.

10: 05 PM: According to PTI, the Congress said the prime minister should apologise for demonetisation as it had inflicted ‘misery’ on the people and dealt a “body blow” to the economy.

9: 54 PM: “When demonetisation was announced to the nation by the Prime Minister, he had said (the aims were) to curb black money, stop counterfeit currency and terrorism. On all these counts, the government has completely failed,” Owaisi added further.

9: 43 PM: Demonetisation has been a ‘disaster’ for the country as it caused a loss of about two per cent to the GDP, PTI quoted AIMIM president Asaduddin Owaisi saying.

9: 25 PM: Arun Jaitley today attributed the lower GDP numbers to pre-GST destocking of goods and expressed hope that the economy will grow at 7 per cent, saying the manufacturing sector has bottomed out, reported PTI.

9: 06 PM: Industry chamber PHDCCI said ease of doing business remains a major concern as manufacturing firms, particularly labour intensive units, are impacted by various stringent laws and compliance costs.

8: 45 PM: According to a PTI report, India Inc today expressed disappointment over the country’s economic growth, which slipped to a three-year low of 5.7 per cent in April-June.

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8: 40 PM: Manufacturing bottomed out in Quarter 1 and services improved. Even the gross fixed capital formulation turned positive: PTI quoted Arun Jaitley speaking on GDP data.

8: 35 PM: Speaking to Reuters, Aditi Nayar, an economist with ICRA said, “The lingering impact of demonetisation is visible in the low growth of construction, referring to a segment of the economy where most people use cash.

8: 30 PM: Left attacks PM Narendra Modi and the Central government on note ban, calling it a money laundering exercise, reported PTI.

8: 25 PM: Manufacturing going down due to GST impact on destocking; with GST implemented, curve could turn for better, FM Arun Jaitley told PTI.

8: 20 PM: India’s highest ever detection of black money and a massive rise in the number of new taxpayers! (22 lakh to 56 lakh): tweets BJP leader and a former professional shooter Rajyavardhan Singh Rathore.

8: 15 PM: SBI says prices have actually crashed in the rural sector which is a cause of concern, SBI’s Soumya Kanti Ghosh told CNBC- TV 18.

7:46 PM Watch the video

7:45 PM  Soumya Kanti Ghosh, SBI to CNBC TV18: Don’t expect investment revival in Q2 & Q3

7:44 PM Mahesh Vyas, CMIE to CNBC TV18: Demonetisation has added to the slowdown that economy was witnessing

7:43 PM  Mahesh Vyas, CMIE to CNBC TV18: Demand is actually low, capacity utilisation is still low

7:42 PM  Mahesh Vyas, CMIE to CNBC TV18: No evidence that there is a pick-up in investment

7:41 PM  Shankar Acharya, Former RBI Deputy Governor to CNBC TV18: Need to look at the over valued exchange rate which is certainly hurting

7:40 PM Shankar Acharya, Former RBI Deputy Governor to CNBC TV18: Should be looking hard at the collapse in manufacturing over the past year

7: 39 PM During the same period of 2016-17, it was 73.7 per cent of the target.

7: 38 PM India’s fiscal deficit at July-end touched 92.4 per cent of the budget mainly because of front-loading of expenditure by various government departments.

7: 36 PM Former chief statistician Pranab Sen: It was expected that the first quarter GDP would be weak because of GST.

7: 35 PM Former chief statistician Pranab Sen: This is about 40 basis point lower than what I was considering. I would be looking at probably now sub-6.3 per cent for the full year

7:33PM Randeep Surjewala, Congress: GDP growth slows from over 8 pc to 5.7 pc yet those living in glass houses of demonetisation disaster remain oblivious in their ivory towers. In last 6 quarters, the economy under Modiji sank from 9.2 pc to 5.7 pc! This is by new method of calculation! Is this demonetisation success formula?

7:32 PM Anand Sharma, Congress: The country has suffered because of the ego of the prime minister, and the finance minister has failed to make amends but is happily busy being an apologist for the prime minister’s wrong decisions.

7: 30 PM Anand Sharma, Congress: The country has suffered because of the ego of the prime minister, and the finance minister has failed to make amends but is happily busy being an apologist for the prime minister’s wrong decisions.

7:29 PM 


7:28 PM Anand Sharma, Congress: The GDP numbers released for the (April-June) quarter confirms that the reckless decision of the prime minister on demonetisation and the policy defaults have led to a major crash in the Indian economy.

7:27 PM The Congress today hit out at the Modi government over the slump in the country’s economic growth, and said the decline was because of the prime minister’s “reckless” decision of demonetisation.

7:26 PM FM Jaitley: Domestic public investment is going to be high as revenue trend is positive

7:25 PM FM Jaitley: GST now implemented, the curve could turn for the better

7:24 PM FM Jaitley: Most manufacturers were destocking which led to slump in manufacturing data

7:23 PM FM Jaitley: Manufacturing has taken a hit due to GST

7:22 PM FM Jaitley: Expect FDI to continue, monsoon picture looks promising

7:21 PM FM Jaitley: Investment services have improved but it is manufacturing that has bottomed out

7:20 PM FM Jaitley: Detailed analysis shows agriculture GDP is in the normal range of over 2%

7:19 PM FM Jaitley: Certainly a matter of concern that GDP has come in at 5.7%

7:18 PM FM Jaitley: GDP data throws up challenges for the economy

7:16 PM FM Jaitley: Government to improve and revive growth figures

7:15 PM FM Jaitley: Need to pull up investments in the coming quarters

7:14 PM FM Jaitley: Manufacturing has gone down, services has improved

7:13 PM Finance Minister Arun Jaitley: GVA growth of first quarter is almost the same as compared to the previous quarter

7:11 PM Crisil’s D K Joshi termed the GDP number as “disappointing” as the expectation was that the growth would be 6.5 per cent.

7:08 PM China clocked a record 6.9 per cent growth in January-March as well as April-June quarters.

7:05 PM Watch IDFC Bank’s Indranil Pan

7:03 PM Watch Pronab Sen

7:01 PM Narendra Taneja, BJP told ET Now: Turnaround of the conomy is around the corner

7:00 PM MV Rajeev Gowda, Congress MP, Rajya Sabha told ET Now: Major mismanagement by the government

6:59 PM MV Rajeev Gowda, MP, Rajya Sabha told ET Now: Right now the direction of growth is negative

6:58 PM MV Rajeev Gowda, MP, Rajya Sabha told ET Now: I would have been the happiest if the economy grows

6:57 PM 

6:56 PM Narendra Taneja, BJP to ET Now: Overall health of the country’s economy will be much better

6:55 PM Narendra Taneja, BJP to ET Now: GDP numbers will go up and clearly transfer into job creation

6:54 PM Sunil Kumar Singh, JDU told ET Now: Demonetisation was able to break the backbone of black economy

6:52 PM Narendra Taneja, BJP leader told ET Now: We are trying to rework the Indian economy

6:51 PM Narendra Taneja, BJP leader told ET Now: Things will improve in the coming quarters

6:50 PM Narendra Taneja, BJP leader told ET Now: This quarter there has been scaling down of production by certain quarters

6:49 PM MV Rajeev Gowda, MP, Rajya Sabha told ET Now: There is no borrowing happening, monumental mishandling of the economy by the government

6:48 PM The combination of lower volumes and higher discounts pre-GST (goods and services tax) and positive WPI (wholesale price inflation) weighed upon the manufacturing sector in Q1, said Aditi Nayar .

6:47 PM The GDP and GVA (growth value added) estimates have undershot our and market expectations by a considerable degree, Aditi Nayar said.

6:46 PM The lingering impact of demonetisation is visible in the low growth of construction, said Aditi Nayar, Economist, ICRA.

6:45 PM Government will do a lot of window dressing, said M Govind Rao

6:44 PM GST uncertainty led corporates to pull down stocks, said TCA Anant.

6:43 PM 

6: 42 PM  Corporate sector is not making much investment, said M Govind Rao.

6: 41 PM A gradual rebound in headline inflation will keep them from imminent cuts, but the weakening demand trajectory certainly adds to the disinflationary trend in core trends,” said Radhika Rao.

6:40 PM These trends will prompt a downward revision in the RBI’s GVA estimates, but we don’t expect a knee jerk shift to an easing bias, said Radhika Rao.

6:39 PM Private sector investments and manufacturing activity, weighed by low inventories and higher input costs, continue to be the weakest links in the growth story, said Radhika Rao.

6:38 PM On the demand end, consumption pick-up was more moderate than anticipated, suggesting spending was not materially front-loaded ahead of the GST implementation, Radhika Rao added.

6:37 PM In net, our full-year GVA estimate of 6.8 percent needs to be revisited, said Radhika Rao.

6: 35 PM Some counter-support is, however, likely from an accumulation in inventories after a strong drawdown in the June quarter, Radhika Rao added.

6:34 PM Of concern, two key factors that provided support in the June quarter – i.e. trade, hotels and transport sectors that benefited from an increase in pre-GST (goods and services tax) sales, along with higher government participation reflected through the public administration sub-sector – are expected to moderate going forward, said Radhika Rao.

6: 33 PM “Headline GVA (gross value added) and GDP growth estimates disappointed, despite the fading impact of demonetisation, ” said Radhika Rao, Group Economist, DBS

6:32 PM

6:31 PM There is a need to focus on the quality of growth rather than quantity, and for this we can afford to loosen our fiscal deficit target, spend more on investments rather than depend only on consumption to fuel growth,” Pan added

6:30 PM In my opinion, the bank balance sheet problem will take a longer time than what others are expecting as it is not only cleaning the bad debt, but also improving capital base following mergers in the sector, Indranil Pan said.

6:29 PM The downside impact from demonetisation is no longer going to be there. Going ahead growth will be driven by GST and the pace of cleaning banks’ balance sheets to improve the credit culture in the economy, said Indranil Pan, Group Economist, IDFC Bank.

6:28 PM A rate cut from RBI now becomes more and more probable, not immediately, but over the next 6 months. We have to revise our GDP outlook numbers for the full year closer or perhaps lower than 7 percent, ” Abheek Barua said.

6:27 PM The numbers seem to suggest that the slowdown from last quarter has intensified due to the combination of long-term slowdown and temporary shock factors like demonetisation and GST (goods and services tax) destocking, Abheek Barua added

6:26 PM “GDP numbers are certainly disappointing,” said Abheek Barua, Chief Economist, HDFC Bank.

6:25 PM But then in the medium to long term it’s expected to be a positive. I would expect GDP for the full year will be somewhere closer to 6 percent. We don’t expect any rate cuts from here on. RBI will stay hooked on to inflation, Anjali Verma added.

6:24 PM “The impact of demonetisation has faded, definitely. But the next quarter impact will be of GST (goods and services tax), which will have an adverse impact on growth overall.  GST impact is just a one quarter phenomena, or at best one month after that, ” Anjali Verma, Economist, Phillipcapital India said.

6:23 PM We do not expect monetary policy committee to pursue any further accommodation, given that drivers behind weaker growth appear to be transitory, said Abhishek Upadhyay

6:22 PM Removal of drags from GST, spillovers from second consecutive year of good rains and tailwinds from more synchronized recovery in global demand should lift growth, even as government spending could remain a drag,  said Abhishek Upadhyay.

6:21 PM In terms of outlook, we continue to expect growth to recover smartly in the second half, although to still lower levels than pencilled in by RBI, Upadhyay said.

6:20 PM  Cash-intensive sectors, including construction and real estate, that bore the brunt of demonetisation impact appear to be recovering smartly, said Abhishek Upadhyay.

6:19 PM But despite the overall poor optics around the headline growth that has printed in the 5 percent handle for the second quarter, there are silver linings. Despite industrial slowdown, private demand has recovered smartly on the back of services, said Upadhyay.

6:18 PM The growth drag on industrial sectors on account of transition to GST (goods and services) appears to be much sharper than that suggested by high frequency indicators, said Abhishek Upadhyay

6:17 PM Abhishek Upadhyay, Economist, ICICI Securities Primary Dealership Ltd, Mumbai said, “The outturn is weaker than expected. Instead of expected acceleration in government spending, there has been a sharp slowdown.”

6:15 PM Watch Chief Statistician TCA Anant

6:12 PM TCA Anant: WPI normalization, not demonetisation, responsible for decline in GDP Q1 figures

6:10 PM TCA Anant: Manufacturing sector may recover in July – September

6:08 PM Watch Former Chief Statistician Pronab Sen

6:06 PM TCA Anant: GST uncertainty led corporates to pull down stocks

6:05 PM TCA Anant: Incorrect to link decline in GVA in Q2 with demonetisation

6:04 PM TCA Anant: Rise in cost and reduced inventory two factors responsible for reduced GVA

6:03 PM TCA Anant: Manufacturing GVA sharply lower due to poor corporate performance

6:02 PM TCA Anant: Major reason for decline in GDP growth is on account of manufacturing

6:01 PM TCA Anant: Agriculture lower than expected due to animal husbandry being slightly lower

6:00 PM TCA Anant: Major sector that has seen a sharp decline in industry

5:59 PM  Q1 FY18 GDP at lowest level since Q4 FY14

5:58 PM Gross Fixed Capital formation growth at 1.61% vs 7.39% YoY

5:57 PM Government Final Consumption growth at 17.17% versus 16.57% YoY

5:56 PM M Govind Rao: Private sector investment is not happening

5:55 PM M Govind Rao: Growth likely to pick up but not very much

5:54 PM M Govind Rao: Consumer confidence was very low in the last few months, going further this should not be a major concern

5:53 PM M Govind Rao: Economy has bottomed out

5:52 PM Saugata Bhattacharya, Axis Bank: This doesn’t go down well with capex driven growth

5:51 PM Public, Admin, Defence and other services growth at 9.5% versus 8.6% YoY

5:50 PM Agriculture growth at 2.3% versus 2.5% YoY

5:49 PM Finance, Insurance, Real Estate and Professional services sector growth at 6.4% versus 9.4% YoY

5:48 PM Mining growth at -0.7% versus -0.9% YoY

5:47 PM Construction sector growth at 2% versus 3.1% YoY

5:46 PM Electricity, gas, water supply and other utility services sector growth at 7% versus 10.3% YoY

5:45 PM Services sector growth at 8.7% versus 9% YoY

5:44 PM Trade, hotels and transport sector growth at 11.1% versus 8.9% YoY

5:43 PM Electricity, gas, water supply and other utility services sector growth at 7% versus 10.3% YoY

5:42 PM Govind Rao: This largely is due to demonetisation impact, the economy has failed to recover.

5:41 PM Q1 farm sector growth at 2.3% versus 2.5% YoY

5:40 PM Q1 Manufacturing sector growth at 1.2% versus 10.7% YoY

5:39 PM GVA growth at 5.6% Vs 7.6% YoY.

5:38 PM

5:37 PM India’s Q1 GDP at 5.7% versus 6.1% QoQ

5:35 PM M Govind Rao: The first quarter numbers are very disappointing

5:33 PM India’s Q1 GDP growth at 5.7%

5:32 PM Electricity production grew 5.4 percent last month from a year ago, faster than a 2.2 percent rise in June. Steel output in July was 9.2 percent on year compared with a 5.8 percent growth a month ago.

5:30 PM The output grew a revised 0.8 percent year-on-year in June. For April-July, the annual output growth was 2.5 percent, data showed.

5:29 PM Growth of eight core sectors slips to 2.4 per cent in July from 3.1 per cent in same month a year ago



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First published on: 31-08-2017 at 17:19 IST