The Indian economy is estimated to have grown between 7.2 per cent and 7.5 per cent in the first quarter of the fiscal, belying expectations of a sharp turnaround in economic activities in 2015-16.
“The data is still being computed but initial indications reveal that growth remains largely on the same footing as the last quarter, if not lower,” said a person familiar with the development.
The economy grew at an estimated 7.5 per cent in the fourth quarter of last fiscal, taking the full year GDP growth to 7.3 per cent. However, GDP grew at a more sluggish 6.7 per cent in the first quarter of last fiscal.
The Central Statistics Office will release the data on growth in gross domestic product (GDP) in the April to June quarter on August 31. The government had pegged GDP growth at 8 per cent and 8.5 per cent in 2015-16, expecting a pick-up in investments on the back of its various reform measures.
However, analysts point out that investment activity is yet to see any significant surge. Meanwhile, deficient rains too are expected to pull down farm sector growth.
“Agriculture growth will be low, if at all it is positive while the index of industrial production too was lower in the first quarter, compared with a year ago. Government expenditure is on the rise but investments are yet to pick up,” said DK Pant, chief economist India ratings, adding that GDP is likely to have grown at 7 per cent in the first quarter while the gross value addition is estimated at 7.2 per cent for the period.
Industrial production grew to a four month high of 3.8 per cent in June this fiscal. However, monsoons are estimated to be about 9 per cent below normal till August 19, according to the Indian Meteorological Department. DK Joshi, chief economist, Crisil said that growth is likely to have been stable at about 7.5 per cent in the first quarter though agriculture sector is likely to be a drag. “First quarter growth is likely to be about 7.4 per cent to 7.5 per cent. We have maintained out full fisc GDP forecast at 7.4 per cent and depending on how the rains play out, we will review it,” he said, adding that it may not be revised downwards as industrial production seems to be picking up.
Earlier this month, global rating agency Moody’s had scaled down India’s growth forecast to 7 per cent from its earlier projection of 7.5 per cent due to below average monsoons and concerns over stalling reforms.