GDP grew at 5.7% in first quarter

Ministry of Statistics & Programme Implementation on Wednesday released India's Gross Domestic Product (GDP) numbers for the quarter April - June 2017. 

GDP at constant (2011-12) prices in Q1 of 2017-18 is estimated at Rs 31.10 lakh crore, as against Rs 29.42 lakh crore in Q1 of 2016-17, showing a growth rate of 5.7%. "Quarterly GVA at basic price at constant (2011-2012) prices for Q1 of 2017-18 is estimated at Rs 29.04 lakh crore, as against Rs 27.51 lakh crore in Q1 of 2016-17, showing a growth rate of 5.6% over the corresponding quarter of previous year," government data show. 

India's GDP stood at 6.1% for January - March 2017 (Q4FY17) and 7.9% of April - June 2017 (Q1FY17).

The economic activities which registered growth of over 7% in Q1 of 2017-18 over Q1 of 2016-17 are ‘trade, hotels, transport & communication and services related to broadcasting’, ‘public administration, defence and other services’ and ‘electricity, gas, water supply & other utility services’. 

The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘manufacturing’,  ‘construction’  and  financial, insurance, real estate and professional services  is estimated to be 2.3%, (-) 0.7%, 1.2%, 2.0% and 6.4%, respectively during this period, Ministry of Statistics & Programme Implementation said. 

Private Final Consumption Expenditure

Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 22.27 lakh crore in Q1 of 2017-18 as against `20.42 lakh crore in Q1 of 2016-17.  At constant (2011-12) prices, the PFCE is estimated at Rs 16.80 lakh crore in Q1 of 2017-18 as against Rs15.76 lakh crore in Q1 of 2016-17. In terms of GDP, the rates of PFCE at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 57.3% and 54.0%, respectively, as against the corresponding rates of 57.4% and 53.6%, respectively in Q1 of 2016-17.

Government Final Consumption Expenditure

Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 5.19 lakh crore in Q1 of 2017-18 as against Rs 4.34 lakh crore in Q1 of 2016-17. At constant (2011-2012) prices, the GFCE is estimated at Rs 3.91 lakh crore in Q1 of 2017-18 as against Rs 3.34 lakh crore in Q1 of 2016-17. In terms of GDP, the rates of GFCE at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 13.4% and 12.6%, respectively, as against the corresponding rate of 12.2% and 11.3% respectively in Q1 of 2016-17.

Gross Fixed Capital Formation

Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 10.69 lakh crore in Q1 of 2017-18 as against Rs 10.37 lakh crore in Q1 of 2016-17. At constant (2011-2012) prices, the GFCF is estimated at Rs 28 lakh crore in Q1 of 2017-18 as against Rs 9.13 lakh crore in Q1 of 2016-17. In terms of GDP, the rates of GFCF at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 27.5% and 29.8%, respectively, as against the corresponding rates of 29.2% and 31.0 %, respectively in Q1 of 2016-17.

source: tradingeconomics.com

Economists at Care Ratings expected the  GDP growth for the first quarter of ongoing fiscal year i.e. FY18 at 6.5% at constant 2011-12 prices. This growth is contingent on realization of Gross Value Added (GVA) growth at 6.3%.

Many economists believed that India's economy growth will see impact of demonetisation followed by Goods and Services Tax which got implemented starting from July 01, 2017. 

Teresa John, Research Analysts at Nirmal Bang said, "We expect India’s gross value added or GVA growth to come in at about 6.2% for 1QFY18 while gross domestic product or GDP is likely to register 6.6% growth." He stated that the numbers will see serial shocks of demonetisation followed by the implementation of Goods and Services Tax or GST is weighing on the economy.

Normura in its report mentioned that the pick-up in growth which was visible in March-end had lost some momentum towards end of June quarter on the backdrop of destocking and uncertainty from GST. 

A Reuters poll pf economists, suggested that the GDP numbers is expected to have expanded 6.6%  in the April-June quarter from a year earlier. Forecasts ranged from 5.7 to 7.2%, as per the poll. 

Real GDP or GDP at constant (2011-12) prices for the year 2016-17 is estimated at Rs 121.90 lakh crore showing a growth rate of 7.1% over the year 2015-16 of Rs 113.81 lakh crore.

According to the revision, India's GDP in 2015-16 stood at 8% as against 7.9% and 7.5% in 2014-15 as against 7.2% earlier.