GDP growth accelerates to 8.2% in Q1

The country’s economic growth soared to an over two-year high in April-June quarter, powered by solid expansion in manufacturing, the farm sector and gathering strength in consumer spending, bolstering the government’s reforms record.

The economy grew 8.2% in April-June, the first quarter of the country’s fiscal year which starts in April, higher than previous quarter’s 7.7% and 5.6% in the first quarter of 2017-18.

This was the fastest expansion since the January-March quarter of 2016.

The manufacturing sector rose an annual 13.5% compared to a decline of 1.8% in the year ago quarter, while the crucial farm sector rose 5.3%, up from 3% growth in first quarter of 2017-18.

The data brought cheers to policymakers, who said it highlighted the measures taken to boost growth and pointed to a solid recovery underway.

The robust GDP number has helped India gallop ahead of China and retain the tag of the fastest growing major economy in the world.

The finance ministry said despite some headwinds like higher crude oil prices, uncertainties on trade front due to protectionist tendencies in some countries, the Indian economy has performed well.

Economists said a positive feature of the growth dynamics has been the buoyancy in employment-supporting sectors such as construction and manufacturing. For private investments to pick up, a strong and sustained revival in household spending is critical. Sustaining GDP growth at over 8% over the next few years would require significant traction in private investments and relentless implementation of reforms to raise productivity.

Separate data showed the fiscal deficit, the difference between expenditure and revenue receipts, at the end of July rose to Rs 5.4 lakh crore or 86.5% of the 2018-19 budget target, while the core sector growth slowed to 6.6% in July from previous month’s 7.6% expansion.

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