New Delhi, Aug 31: The GDP growth slowed to 7 per cent in the April-June quarter, from 7.5 per cent in the previous quarter, amid deceleration in farm, services and manufacturing sectors.
A slower GDP growth, along with slower pace of industrial production expansion, however bolsters the case for a rate cut by the Reserve Bank.
The Gross Value Added (GVA), a new concept introduced by CSO to measure the economic activity, also slipped during the first quarter to 7.1 per cent, from 7.4 per cent a year ago.
The GDP grew at 7.5 per cent in the January-March quarter while it was 6.7 per cent in the April-June quarter last year, according to data from the Central Statistics Office (CSO).
The nominal GDP and GVA at current market price showed a steep decline in the quarter under review. The nominal GDP slipped to 8.8 per cent in Q1 from 13.4 per cent a year ago while the GVA growth rate nearly halved to 7.1 per cent from 14 per cent a year ago.
The government towards the beginning of the fiscal has projected a growth rate of 8.1-8.5 per cent in the current fiscal, which may be difficult to achieve.
RBI, which has cut interest rate by 0.75 per cent in three tranches since January, is scheduled to announce the next bi-monthly policy on September 29.
The data showed that the manufacturing sector GVA at constant prices (2011-12) rose 7.2 per cent in the April-June quarter as against 8.4 per cent in the year-ago period.
Similarly, the growth in the output of electricity, gas, water supply and other utility services decelerated sharply to 3.2 per cent as against 10.1 per cent a year earlier.
The farm and allied sectors grew at 1.9 per cent, down from 2.6 per cent in the previous year. The output of mining and quarrying sector too slipped marginally to 4 per cent, from 4.3 per cent a year ago.
Financial, real estate and professional services growth shrank to 8.9 per cent as against 9.3 per cent a year earlier. However, the construction activity registered an increase of 6.9 per cent, up from 6.5 per cent in the previous year.
The BJP MP Tarun Vijay, however, said the credit for 7 per cent growth goes to the economic policies implemented by Prime Minister Narendra Modi at a time when the neighbouring economies are floundering.
Vijay said: “While our neighbouring economies are going slow, it goes to the credit of Modinomics that 7 per cent growth has been achieved and we aim for double digit growth. We will certainly be achieving that. Prime Minister Narendra Modi’s economic policies will show more dividend in the coming months.”
(With Agency Inputs)