India's economy expanded 7.7 per cent year-on-year during the January-March quarter, recording the quickest pace of growth in almost two years.
In what seems to be a positive indicator for India, the country's Q4 FY18 GDP (January-March quarter) growth figure has increased to 7.7 per cent, beating estimates of an ET NOW poll which predict the number at 7.5 per cent. Data released by the Central Statistics Office (CSO) indicated that the economy is heading towards a positive direction.
Finance Minister Piyush Goyal said the 7.7 per cent GDP growth showed the economy was on right track for higher growth in the future.
"These corroborate with FICCI's surveys that reveal an improving outlook on investments". We expect the economic growth to consolidate above 7% in FY2019, on the back of the continued benefits of the implementation of the GST, healthy consumption demand, government expenditure, and a back-ended pickup in investment activity. "On balance, GDP and GVA growth are expected to improve to 7.1% and 7.0%, respectively, in FY2019, from 6.7% and 6.5%, respectively, in FY2018".
India's economic expansion at 7.7 per cent was significantly higher than China's 6.8 per cent in the January-March period.More news: Syria's President Assad 'to visit North Korea'
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The per capita income at current prices during 2017-18 is estimated to have attained a level of Rs 1,12,835 as compared to the estimates for the year 2016-17 of Rs 1,03,870 showing a rise of 8.6 percent. He emphasized that this is the development under leadership of Prime Minister Narendra Modi and Union Minister Arun Jaitley. His government launched a nationwide goods and services tax (GST) but its introduction was botched, almost scuttling India's growth prospects in the near term. There has been improvement in growth rate in manufacturing and construction.
Also, export-oriented industries particularly MSMEs in sectors like iron and steel, machinery and metal products, chemicals and agricultural goods are likely to take a hit.
The faster pace of growth in the latest quarter might also strengthen expectations for a rate hike by the RBI later this year.
While global rating agency Moody's had earlier cut India's GDP forecast due to rising oil prices and several other factors, it suggested that the country's economic growth would expand by 7.3 per cent in the fiscal. Some headwinds do remain from the perspective of rising crude oil prices, and unwinding of global easy monetary policy & rising interest rates.
Domestic prices of petrol and diesel are near all-time highs, putting pressure on the government to bring down taxes on the fuels.