India’s gross domestic product is estimated to have grown at 7 per cent in the first quarter of the fiscal, indicating that a full recovery in the economy is still some quarters away.
While this is much higher than the 6.7 per cent growth clocked in the first quarter of 2014-15, it is muted compared to the 7.5 per cent growth in the January to March quarter of last fiscal.
Quarterly gross value added at basic price at constant prices too grew at a sluggish 7.1 per cent in the first quarter of the fiscal as compared to a year ago.
“The economic activities which registered growth of over 7 per cent in the first quarter of 2015-16 as compared a year ago are ‘manufacturing’, ‘trade, hotels and transport and communication and services related to broadcasting’ and ‘financial, insurance, real estate and professional services’,” said the Central Statistics Office in a release on Monday.
However, growth in agriculture is estimated at a mere 1.9 per cent while the growth in mining and quarrying was just 4 per cent during the period, it added.
The government in the Union Budget 2015-16 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.
The sluggish growth data is also expected to lead to renewed demands for a rate cut by the Reserve Bank of India in its next bimonthly monetary policy review. The central bank in its policy review maintained a status quo on rates to ensure that inflation remained under control but industry has been seeking a cut in key rates to help fund capex plans.