India’s economy grew at 7.3 per cent in 2014-15 fiscal

Arun Jaitley: Absolutely clear that the economy is in recovery mode

By: ENS Economic Bureau | New Delhi | Updated: May 30, 2015 11:51 am
Indian Economy, India GDP, India GDP growth, India GDP 2014-2015, India economy news, India GDP news, Indian economy growth, Growth ‘Manufacturing sector is a silver lining.’ (Express Photo by Amit Mehra)

Finance Minister Arun Jaitley Friday said it was “absolutely clear that the economy is in recovery mode” after data showed that the economy grew at 7.3 per cent in 2014-15. The country posted a 7.5 per cent growth in the January to March quarter of the fiscal, outpacing China’s GDP of 7 per cent in that quarter.

But GDP data again underlined the divergence between manufacturing growth and industrial production numbers.

“Real GDP or GDP at constant (2011-12) prices in the year 2014-15 is now estimated at Rs 106.44 lakh crore (against Rs 106.57 lakh crore estimated earlier), showing a growth rate of 7.3 per cent (against 7.4 per cent estimated earlier) over the New Series/First Revised Estimates of GDP for the year 2013-14 of Rs 99.21 lakh crore,” an official release by the Central Statistics Office (CSO) stated.

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In 2013-14, the economy grew at 6.9 per cent.

Quarterly GDP data for the first three quarters of 2014-15 was also significantly revised in the provisional estimates. The first and second quarter estimates for GDP have been revised upwards to 6.7 per cent and 8.4 per cent in the provisional estimate from 6.5 per cent and 8.2 per cent in the advance estimate, respectively. The GDP data for the third quarter ended December 31, 2015 has however, seen a sharp downward revision to 6.6 per cent in the provisional estimate from 7.5 per cent in the advance estimate.

Rebutting former Prime Minister Manmohan Singh’s remark that the Indian economy was “fragile”, Jaitley said an economy growing at the fastest pace in the world cannot be fragile. “It is absolutely clear that the economy is in recovery mode,” he said. “Manufacturing sector is a silver lining.”

Stating that India had surpassed China’s growth rate, Arvind Subramanian, chief economic adviser to the Finance Ministry, said, “GDP numbers are encouraging. The data shows signs of pick up, both manufacturing and services have improved.”

Finance Secretary Rajiv Mehrishi, too, said that the pick-up in manufacturing was an encouraging sign.
Belying concerns over private sector investments, the data points to a rosier picture of the manufacturing sector, where gross value addition is estimated to have grown at 8.4 per cent in the fourth quarter of the fiscal and 7.1 per cent in 2014-15.

However, industry as well as the government is pitching for a cut in key rates by the Reserve Bank of India’s monetary policy review on June 2 to help improve investments and economic activity.

Earlier this week, RBI governor Raghuram Rajan met Jaitley, who has publicly favoured a rate cut, pointing to the fall in inflation.

“Slower farm growth has cooled down the GDP growth to 7.3 per cent while the manufacturing sector remains buoyant in contrast to the index of industrial production (IIP),” said D K Joshi, senior director and chief economist, Crisil. Joshi added that he expects a rate cut of 25 basis points by the RBI next week.

“The RBI takes into account a host of indicators, most of which at the ground level continue to show a weakness — be it credit, IIP, profit margins or private investments,” he said.

However, the CSO attributed the higher growth in manufacturing to the revision of the IIP growth of manufacturing to 2.3 per cent for 2014-15 as against the estimated growth of 1.6 per cent while compiling the advance estimates. “In addition, the corporate performance of the manufacturing sector has also been taken into account,” it added.

Agriculture grew at 0.2 per cent in 2014-15 as against 3.7 per cent in the previous fiscal, while mining and quarrying grew a mere 2.4 per cent compared to 5.4 per cent a year ago. In contrast, trade, hotels, transport, communication and services relating to broadcasting grew at 10.7 per cent, while financial, real estate and professional services grew at 11.5 per cent.

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  1. Bobby S
    May 30, 2015 at 8:25 am
    India always has potential to be Silicon Valley East if it invests in developing tech talent and facilities.
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      Aditya
      May 30, 2015 at 7:54 am
      Great, but hoping to see higher growth rates in the future.
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        Aryan
        May 30, 2015 at 5:49 am
        4 days ago Mr Jaitley was very optimistic, when he suggested that dark time in black money had come in past for India. It is not true. When you come to an internatioanl airport and do not have a sim card for a phone, for example, you can see a lot of mobile companies offering sim cards. No one mobile company gives a receipt, if you come an agrement and pay money for the sim mobile card set up. The black or gray money is 60% of all turnover in Indian market. The problem of "black money" or lack of the registration of deals can not fade away by itself As well as Congress party will not leave their positions by themselves. The Central Government still does nothing in this regard.
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          Aryan
          May 30, 2015 at 5:56 am
          7.3% growth is alaw figure for India. Check the situation with Indian roads and you will se that, Indian roads are in much poor condition that the same level infuental roads in Europe. Much influental examples represent modern buildings and building devlopment sphere in smal cities, like Lukhnow. So, for tipical indians, the normal grows can be expected on level higher than 7,3 %, - a figure proposed by Mr Jaitley, for each typical Indian development.
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            Ips
            May 30, 2015 at 7:17 am
            We have to appriciate our leaders .they are not at all afraid to mis lead countrymen on any aspect.They have taken us for granted.The ground reality is totally different.The prices are going up,law and order situation is detorating very fast.Education and health are not alt on list of Govt.Do our leaders feel that all foreign countries and their leaders are fool and believe what ever is said by government?Jit is very high time that we come to reality and accept the facts.
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