What is the issue?
- The recently concluded third quarter registered a GDP growth rate of 7.2%, which is the fastest thus far in the financial year 2017-18.
- The economic outlook hence looks optimistic.
How has financial year 2017-18’s growth trajectory been?
- Previously - In the first quarter of FY 17-18, Gross Value Added (GVA) for the first quarter of the financial year was 5.6%.
- In the second quarter, the GDP growth registered was 6.5% and growth in the GVA stood at 6.2%.
- Third Quarter - GVA growth in the third quarter increased further to 6.7% as the manufacturing sector exhibited a strong recovery.
- The manufacturing sector grew at 8.1% in the third quarter, following up on a 6.9% growth in the second quarter.
- The agriculture sector also saw relatively robust growth in the third quarter, growing at 4.1%, up from 2.7% in the first and second quarters.
- Consequently, the overall annual growth estimate has also been revised marginally upwards from 6.5% to 6.6%.
What are the other parameters?
- The GDP trends were found to be consistent with the robust growth of the manufacturing “Purchasing Managers Index” (PMI).
- Index of Industrial Production (IIP) and consumer demand too showed good correlation with the GDP growth trends.
- Gross Fixed Capital Formation (GFCF), a measure of overall investment activity in the economy, grew at a robust 12% in the third quarter.
- Notably, GFCF registered only 6.92% growth in the previous quarter.
- The fast recovery in all these economic indicators and consumer demand reflects a positive economic sentiment.
- This reiterates the hope that India is on the right path to become one of the fastest major economy in the world surpassing China.
Source: The Hindu
