Proving Sceptics Wrong, India Posts 7.2 Per Cent Growth In Third Quarter Of This Fiscal

Proving sceptics and opposition parties led by the Congress wrong, India recorded a gross domestic product (GDP) growth of 7.2 per cent in the third quarter (October-December) of the current financial year (April 2017-March 2018). Government data showed on Wednesday (28 February) that the economy has weathered demonetisation and goods and services tax (GST) disruptions after the GDP registered poor growth of 5.7 per cent in the first quarter (April-June) and 6.5 per cent in the second (July-September).

The GDP growth has been aided by an 8.1 per cent growth in manufacturing sector, 9 per cent growth in trade, hotels, transport, communications and services, 6.7 per cent in real estate, financial and professional services and 4.1 per cent growth in agriculture, forestry and fishing. Mining and quarrying sector registered a 0.1 per cent drop in growth.

The latest data signal that the economy in the third quarter grew at its fastest pace in the current fiscal year. The growth beat market expectations of 6.9 to 7 per cent growth.

The third quarter also saw higher spending by the government that helped the public administration, defence and other services grow by 7.1 per cent.

Times of India quoted ICICI Securities PD economist Abhishek Upadhyay as saying that in the latest quarter, the "government spending was stronger and private consumption demand was robust as well, as seen in strong growth in auto sales."

“Recent buoyancy in indicators such as cement output also point to recovery in segments such as construction and real estate that were hit most from demonetisation," Upadhyay added.

Economists in a recent poll raised concerned about the increase in non-performing assets of state-run banks, and said if they are not handled effectively it would hurt economic activity. But their fears have now been laid to rest by the latest growth numbers.