Gross Domestic Product (GDP) for the second quarter ended September 30, 2018, stood at 7.1 percent, as against 6.3 percent in the same period of last year. Although, the GDP softened on quarter-on-quarter basis (it was 8.2 percent in the first quarter of current fiscal), it's rise over the last year's growth numbers are a shot in the arm for Prime Minister Narendra Modi's government months before the general elections.
Gross Value Added (GVA) for the given period stood at 6.9 percent versus 6.1 percent in the corresponding quarter of last year. GVA in the first quarter of this financial year stood at 8 percent. However, this was the slowest GDP growth in three quarters.
source: tradingeconomics.com CNBCTV-18 poll estimated GDP growth for the second quarter at 7.4 percent while growth in GVA was expected at 7.3 percent.
Analysts and industry experts said that the softness in GDP growth in the second quarter could be attributed to slower growth in India's agriculture and industrial sectors.
Lead indicators like corporate sector operating performance was up between 9 and 10 percent in the second quarter while passenger car sales, domestic air traffic and cement production grew in double digits in the given three months.These GDP numbers come in on the back of new GDP series data that the Central Statistics Office (CSO) released earlier this week. The government
on Wednesday lowered the GDP growth rates for a majority of the previous 10 years of the United Progressive Alliance (UPA) regime, saying the data has been 'recalibrated' to reflect a more appropriate picture of the economy.
The GDP growth rates for FY 2006
-12 was revised using new back series data, chief statistician Pravin Srivastava said at a press conference.
As per the data released by the Central Statistics Office (CSO), the economy in 2010-11 grew by 8.5 percent as against 10.3 percent estimated earlier.
"It is a number which is far lower than market expectations and also our expectations," said Soumya Kanti Ghosh, group CEA, State Bank of India (SBI). "The sense of 7 percent or sub 7 percent growth rate which we were expecting in Q4 of this year, may actually materialise sooner than that.”
We calculated the core GVA part which is basically index excluding the agriculture and the public sector, so the private part has actually significantly slowed down to 6.6 percent, Ghosh said.It means that from 8.1 percent in Q1 it is down to 6.6 percent. So, there is a slowdown across the board, he added.
“We had a GDP forecast of 7.4 percent and this is definitely lower than that," DK Joshi, chief economist, CRISIL.
two factors which are pulling the services down, one is the banking sector which is a significant part of the financial sector, and second is telecom in the trade, hotel, and transport segment, Joshi said.
"The numbers are quite disappointing across the board. My numbers were significantly higher than these. I would say largely construction, public administration, and electricity were known to be buoyant and that has been the case," said Upasna Bhardwaj, senior economist, Kotak Mahindra Bank.
"Unless the services sector turns around, I think the GDP growth will remain around 7 percent,” he added.