Jaitley: India has standardised itself for growth rate of 7-8%

  • Jaitley: India has standardised itself for growth rate of 7-8%

Jaitley: India has standardised itself for growth rate of 7-8%

According to Assocham's Secretary General D.S. Rawat, the 6.3 per cent growth in the GDP for the second quarter has come "as a big relief to India Inc, in the backdrop of quite subdued performance of the previous quarter".

The government accounts data, released earlier in the day, showed that the Centre's fiscal deficit touched 96 per cent of the budget estimate in the first seven months of the year.

Jailtey said achieving a 10% economic growth rate is "very challenging" and double-digit GDP growth will depend on how the world economy moves. "We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion", Chidambaram said in his reaction to the latest GDP figures released by the Central Statistics Organisation (CSO).

India's economic growth bounced back from a three-year low, giving the central bank enough ammunition to keep interest rates on hold 6 December amid an uptick in inflationary pressures.

Expressing concern on the GDP numbers, Finance Minister Arun Jaitley said, "Last five quarters had witnessed a downward trend, GDP at 6.3% marks the reversal of that trend".

"Manufacturing reported growth of 7 per cent, electricity, gas and water supply at 7.6 per cent, and trade, hotels, transport and communication grew at 9.9 per cent", he said. "Gross fixed capital formation has also picked up from last year's lacklustre pace". "It's possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later...inventory accumulation effect may persist in the third quarter as well", he explained. "In the previous quarter, businesses were delaying production amid preparations for the GST launch", he said, adding that the output in the September quarter is primarily for consumption and sales.

Speaking at the HT Leadership Summit here, he said India has done well by growing at 7-8 per cent during the last three years.

The country's economic growth recovered to more than 6 per cent in the July-September quarter, backed by strong manufacturing, allaying doubts related to disruptions caused by the goods and services tax (GST). Manufacturing grew 7% while agriculture growth was 1.7%, down from 2.3% in the trailing quarter. The growth in public administration, defence and other services also stood at 6 per cent.