The Central Statistics Office on Wednesday said the country’s GDP grew at 7.1 percent in the first quarter. Yet, the Finance Ministry is still optimistic of close to 8 per cent growth this fiscal. “Given the good monsoon and the Seventh Pay Commission award, we expect growth this year to be higher than last year,” said Economic Affairs Secretary Shaktikanta Das, adding that the low growth in the first quarter was due to higher subsidy expenditure and lower net indirect taxes.
The April-June quarter number is lower than the 7.5 percent expansion in Q1 of last fiscal and the 7.9 percent growth in the last quarter of 2015-16.
The gross value added at basic prices grew 7.3 percent in the first quarter, marginally higher than the 7.2 percent expansion a year ago.
Agriculture, mining, and construction registered weak or no growth in the first quarter, offsetting the over 8 per cent growth registered in manufacturing, electricity generation, financial services, public administration and trade. Analysts remained upbeat about the growth, but raised concerns over falling investments. “Good agriculture will swing the growth higher in the next few quarters. We believe 7.9 per cent growth is possible this year with buoyant agriculture,” said DK Joshi, chief economist, Crisil, noting that real investment fell by 3.1 percent in the first quarter.