The Centre on Wednesday said India’s Gross Domestic Product grew 7.2% in the third quarter of the 2017-’18 financial year, up from 6.3% in the quarter before that, Reuters reported.
GDP growth had declined to a three-year low of 5.7% in the April-June quarter of 2017-’18, but recovered to 6.3% in the following quarter. The government also revised its GDP forecast for the 2017-’18 financial year to 6.6% from its previous prediction of 6.5%.
“The economy is on the right track to accelerate and the current expansion in the growth rate reflects that the reforms initiated by the government have started showing results,” Dr Bibek Debroy, the chairperson of the Economic Advisory Council to the Prime Minister, said.
He expressed hope that the government’s commitment to implementing structural reforms would fuel an increase in the growth rate. “GDP trends are consistent with the robust growth of the manufacturing Purchasing Manager’s Index, the Index of Industrial Production, and consumer demand,” the economist pointed out.
On January 5, the Central Statistical Office had estimated that India’s GDP would grow at 6.5% in the 2017-’18 financial year, a drop from 7.1% in 2016-’17. Weeks later on January 29, the Economic Survey tabled in Parliament forecast that the Indian economy was likely to grow at 6.75% in 2017-’18, and accelerate to 7% to 7.5% in 2018-’19.
Despite this, the problem of non-performing assets plaguing banks has investors concerned about their impact on economic activity. The recent scam, involving the Punjab National Bank, added to their worries about its impact on economic activity.