Bharat SainiLast Updated on November 6, 2018 by Bharat Saini
India remained the fastest-growing large economy in the World with GDP growth of 8.2% in real terms in the first quarter (April- June) Q1 of 2018-19, as China’s economy expanded by 6.7% in April-June, down from 6.8% in the first quarter January-March 2018, in line with a 6.7% rate tipped in an AFP survey of economists (Agence France-Presse Beijing News July 16, 2018).
India’s Q1 GDP (Gross Domestic Product) Growth soars to Nine Quarter high of 8.2%, as against Q1 of 2017-18 growth rate estimates of 5.6% only, represent a significant jump reflecting superior acceleration in India’s growth trajectory and is in line with momentum built in the economy, reinforcing the high growth of 7.7 % recorded in last quarter Q4 of 2017-18, as per estimates released on August 31, 2018 by the Central Statistics Office (CSO). The CSO estimates state that GDP at constant prices was ₹33.74 lakh crore for Q1, 2018-19, a rise from ₹31.18 lakh crore and ₹29.42 lakh crore for the same period in 2017-18 and 2016-17, respectively. This validates that the economic fundamentals remain robust.
This Growth momentum is broad-based and has been driven by 8.4% growth in consumption expenditure and 10.0% growth in fixed investment. The latter development is particularly encouraging as it has come about over an impressive growth of 14.4% in Q4 of 2017-18 and augurs well for future growth.
Arun Jaitley Union Minister of Finance and Corporate Affairs said, “India’s GDP for the first quarter this year growing at 8.2 per cent in an otherwise environment of global turmoil represents the potential of New India”, and added “Reforms and fiscal prudence are serving us well. India is witnessing an expansion of the neo middle class”.
GDP = GVA + Taxes on products – Subsidies on products. Gross Value Added is used for measuring gross regional domestic product and other measures of the output of entities smaller than a whole economy as the total aggregates of taxes on products and subsidies on products are only available at whole economy level.
GVA in different sector points towards the fact that the:
- Growth of Agriculture Sector in Q1 of 2018-19 was robust at 5.3 % on top of 4.5 % growth in Q4 of the previous financial year.
- Growth of Manufacturing Sector GVA picked up significantly to 13.5 % in Q1 of 2018-19, as against negative growth of 1.8 % in Q1 of 2017-18.
- Growth of Construction Sector GVA was 8.7 % in Q1 of 2018-19, as compared to 1.8 % in Q1 of 2017-18. The services sector continued to do well, building up on growth achieved last year.
Subhash Chandra Garg, Secretary Department of Economic Affairs tweeted, “Excellent growth performance in I qrtr. 8.2% overall growth, 13.5% growth in manufacturing and over 10% in capital formation. V shaped recovery of growth in Indian economy is complete now. We should grow at robust and steady state in 18-19 remaining fastest economy in World.”
Dr Hasmukh Adhia, Finance Secretary tweeted, “The GDP growth rate of 8.2% for the Q1 (April-June) of fiscal year 2018-19 indicates clearly that several structural reforms introduced such as GST have started giving rich dividends. The growth in manufacturing sector (13.5%) also indicates broad based recovery of demand. It has been a remarkable speed of economic recovery in the last 4 quarters- 6.3%, 7%, 7.7% and now 8.2%”.
Dr. Bibek Debroy, Chairman of the Economic Advisory Council to Prime Minister attributed this positive trend to continued impetus on structural reforms and effective implementation of on-going policy initiatives. He further stated that the focus on boosting capital spend in infrastructure sector and multiple initiatives to provide universal access to basic goods and services has not only contributed to this growth but has improved its quality as well.
Indian economy has performed well despite an uncertain international environment and volatile crude oil prices, uncertainties on trade front due to protectionist tendencies in some countries; India’s sustained growth reflects its strong resilience to adverse global conditions, because of strong economic fundamentals. We can expect the growth for the year as a whole to be very robust and India to be the fastest growing economy in the world.
