India's second quarter GDP growth slows down

India's Gross Domestic Product (GDP) growth for the quarter July-September slowed to 7.3% as against 7.6% during the same period last year.

"GDP at constant (2011-12) prices in Q2 of 2016-17 is estimated at Rs 29.63 lakh crore, as against Rs 27.62 lakh crore in Q2 of 2015-16, showing a growth rate of 7.3%. Quarterly GVA at Basic Price at constant (2011-12) prices for Q2 of 2016-17 is estimated at Rs 27.33 lakh crore, as against Rs 25.52 lakh crore in Q2 of 2015-16, showing a growth rate of 7.1% over the corresponding quarter of previous year", Ministry of Statistics & Programme Implementation said.

The economic activities which registered growth of over 7% in Q2 of 2016-17 over Q2 of 2015-16 are ‘Public administration, defence & other services’, 'financial, insurance, real estate and professional services', ‘manufacturing’ and ‘trade, hotels and transport & communication and services related to broadcasting’. The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘electricity, gas, water supply & other utility services,  and ‘construction’   is estimated to be 3.3%,  (-)1.5%, 3.5% and  3.5%  respectively, during this period.

In the last quarter India's GDP growth slowed down to 7.1% as against 7.5% in the same period of last year and 7.9% in the quarter ended March 2016. 

source: tradingeconomics.com

A Reuters poll had predicted that India`s nearly $2 trillion economy expanded 7.5% in July-September from the same period a year ago, accelerating from a 15-month low of 7.1% in the previous quarter. According to the median consensus of 35 economists, GDP was forecasted ranged from 6.5% to 8.7%.

Though the economy was expected to pick up during the quarter, but Prime Minister Narendra Modi's surprise move to abolish Rs 500 and Rs 1000 notes, has created a sudden cash crunch in the country.

However, where various rating agencies had revised their GDP outlook for the near term due to impact of demonetisation, on Monday, Union Minister Nirmala Sitharaman in a written reply to Lok Sabha had said that India's economy grew at 7.1% in the first half of the current fiscal despite subdued growth in the world economy. 

Also, NITI Aayog's Arvind Panagariya, had said that due to liquidity crunch in the system, it will impact the economic activity maximum for a quarter. He said that the shortage will stay only for three months.