India's GDP growth slowed down to 7.1% in the first quarter of current fiscal as against 7.5% in the same period of last year and 7.9% in the quarter ended March 2016. 

GDP at constant (2011-12) prices in Q1 of 2016-17 is estimated at Rs 29.17 lakh crore, as against Rs 27.24 lakh crore in Q1 of 2015-16, showing a growth rate of 7.1%, Ministry of Statistics & Programme Implementation (MoSPI) said. "With good monsoon, 7th Pay Commission award and structural reforms, we expect GDP growth closer to 8% in FY'17, Department of Economic Affairs Secretary Shaktikanta Das said.

Harshavardhan Neotia, President, FICCI said, “We expect growth to gain momentum in the second half of the current fiscal year. The good monsoon is a huge positive and an improvement has been noted in the kharif acreage." 

GDP is derived by adding taxes on products net of subsidies on products to GVA at basic prices. Growth in collection of Union Excise duties, custom duties and service tax was  61%,  18% and 29% respectively in  Q1, 2016-17 as against growth of 104%, 22% and 14% respectively, in Q1 2015-16.  Major subsidies grew by 53% in Q1 of 2016-17 as against decline of 26% in Q1 2015-16.

It said, "The first quarter estimates are based on agricultural production during Rabi season of 2015-16 obtained from the Ministry of Agriculture, Department of Agriculture & Cooperation(DAC), abridged financial results  of  listed companies from BSE/NSE, Index of Industrial Production (IIP), monthly accounts of Union Government Expenditure maintained by Controller General of Accounts (CGA) and of State Government expenditure maintained by Comptroller and Auditor general of India (CAG) for the period April-June 2016-17."

Shubhda Rao, Group President & Chief Economist, Yes Bank said, "I think there is still tentativeness in sustaining the growth momentum as reflected by this data. Broadly, investment continues to remain on a weak turf. We hope that in the second half, consumption will support growth. The high frequency indicators do suggest a recovery."

Neotia said, "The agriculture sector performance is likely to pick up giving an impetus to rural consumption. Also, the seventh pay commission is expected to push demand. This uptick is likely to give a thrust to industrial growth as well. However, it will be critical to maintain this momentum going forward."

Abhishek Upadhyay, Economist, ICICI Securities, said, "Growth continues to be driven by government spending while private spending remains muted, which is a worry. Agriculture growth came weak this time but good monsoon is expected to boost overall growth in the second half. We continue to expect GDP to grow at 7.7-7.8% for the full fiscal year ending in March and GVA growth of 7.6%."

Sectoral 

Agriculture, forestry and fishing

Quarterly GVA at basic prices for Q1 2016-17 from ‘agriculture, forestry and fishing’ sector grew by 1.8% as compared to growth of 2.6% in Q1 2015-16.

Mining and quarrying

Quarterly GVA at basic prices for Q1 2016-17 from ‘mining and quarrying’ sector grew by   (-)0.4% as compared to growth of 8.5% in Q1 2015-16. 

Manufacturing

Quarterly GVA at basic prices for Q1 2016-17 from ‘manufacturing’ sector grew by 9.1% as compared to growth of 7.3% in Q1 2015-16. 

Electricity, gas, water supply and other utility services

Quarterly GVA at basic prices for  Q1 2016-17 from ‘Electricity ,Gas, water supply and other utility services’  sector  grew by 9.4% as compared to growth of 4.0% in Q1 2015-16.  

Construction

Quarterly GVA at basic prices for Q1 2016-17 from ‘Construction’ sector grew by 1.5% as compared to growth of 5.6% in Q1 2015-16. 

Trade, hotels, transport, communication and services related to broadcasting

Quarterly GVA at basic prices for Q1 2016-17 from this sector grew by 8.1% as compared to growth of 10.0% in Q1 2015-16. 

Financial, insurance, real estate and professional services

Quarterly GVA at basic prices for Q1 2016-17 from this sector grew by 9.4% as compared to growth of 9.3% in Q1 2015-16.

Public administration, defence and other services

Quarterly GVA at basic prices for Q1 2016-17 from this sector grew by 12.3% as   compared to growth of 5.9% in Q1 2015-16.

Industry body Ficci, on Tuesday, said that the Indian economy is estimated to grow at 7.8% in the current financial year of 2016-17 (FY17) on the back of good monsoon, better performance of agriculture and industry sector. The analysis was the conclusion of a survey it conducted among leading economists belonging to the industry, banking and financial services sector during July to August period this year.

Abheek Barua, Chief Economist, HDFC Bank said, "While an unfavorable base effect is at play, there is a likely slowdown in services sector activity, which alone explains more than half of the moderation in overall growth. Within the industrial sector, while mining has shown positive traction, there is a possible moderation in activity for manufacturing and construction sectors."

ICRA expected GDP to remain flat at 7.2% in the first quarter under the gross value added (GVA) calculation.

(With Reuters inputs)