India's FY18 GDP growth estimated at 6.5%, says CSO data

Key highlights:

• The GDP growth during 2017-18 is estimated at 6.5% as compared to the growth rate of 7.1% in 2016-17
• Anticipated growth of real GVA at basic prices in 2017-18 is 6.1% as against 6.6% in 2016-17
• Manufacturing sector is estimated to grow by 4.6% in 2017-18 as compared to growth of 7.9% in 2016-17

The Central Statistics Office (CSO) on Friday released the first advance estimates of GDP growth for current financial year, stating that Indian economy will expand by 6.5% in 2017-18.

The economy had grown by 6.3% in the September quarter, after slumping to a three-year low of 5.7% GDP growth in the June quarter as implementation of goods and services tax (GST) and demonetisation took their toll, according to the CSO report.

The salient features of the estimates are detailed below: 

Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2017-18 is likely to attain a level of Rs 129.85 lakh crore, as against the Provisional Estimate of GDP for the year 2016-17 of Rs 121.90 lakh crore, released on 31st May 2017. The growth in GDP during 2017-18 is estimated at 6.5 percent as compared to the growth rate of 7.1 per cent in 2016-17.

Real GVA, i.e, GVA at basic constant prices (2011-12) is anticipated to increase from Rs 111.85 lakh crore in 2016-17 to Rs 118.71 lakh crore in 2017-18. Anticipated growth of real GVA at basic prices in 2017-18 is 6.1 percent as against 6.6 percent in 2016-17.

The sectors which registered growth rate of over 7.0 percent are, 'public administration, defence and other services’, ‘Trade, hotels, transport, communication and services related to broadcasting’, ‘electricity, gas, water supply and other utility services’ and 'financial, real estate and professional services'. 

The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘manufacturing’, and ‘construction’ is estimated to be 2.1 per cent, 2.9 per cent, 4.6 percent and 3.6 percent respectively.

Agriculture, forestry and fishing

The ‘agriculture, forestry and fishing’ sector is likely to show a growth of 2.1 per cent in its GVA during 2017-18, as against the previous year’s growth rate of 4.9 percent. The GVA estimates of this sector have been compiled using the First Advance Estimates of production of major kharif crops for 2017-18 and targets based on rabi sowings. According to the information furnished by the Department of Agriculture and Cooperation (DAC), the production of food grains during the Kharif season of agriculture year 2017-18 was 134.67 million tonnes as compared to 138.52 million tonnes during the same period in 2016-17. 

In case of livestock sector, estimates of production, mainly in the form of production targets for milk, egg, meat and wool from the Department of Animal Husbandry, Ministry of Agriculture has been used. 

Mining and quarrying 

GVA at basic prices for 2017-18 from ‘mining and quarrying’ sector is estimated to grow by 2.9 percent as compared to growth of 1.8 percent in 2016-17. The key indicators of mining sector, namely, production of coal, crude oil and natural gas registered growth rates of 1.5 per cent, (-)0.2 percent and 3.7 percent respectively during April-November, 2017-18. 

Annual forecast of production estimated in respect of these items have been used to extrapolate the Provisional
Estimates of value of output of coal, crude petroleum, and other major and minor minerals, respectively. IIP of mining registered growth rate of 3.4 percent during April-October, 2017-18.

The advance estimate of IIP of Mining compiled for the current year has been used for compilation. The private corporate sector growth in the mining sector for 2017-18 is estimated using the information available on the performance of major listed companies during the first half of financial year 2017-18.

Manufacturing

GVA at basic prices for 2017-18 from ‘manufacturing’ sector is estimated to grow by 4.6 percent as compared to growth of 7.9 percent in 2016-17. The private corporate sector growth in the manufacturing sector for 2017-18 is estimated using latest available information on major listed companies during first half of financial year 2017-18. 

The private corporate sector growth (which has a share of over 70 percent in the manufacturing sector) as estimated from available data of listed companies is 7.4 percent at current prices during 2017-18. 

The quasi corporate and unorganized segment (which include individual proprietorship and partnerships and khadi & village Industries has a share of around 21 percent in the manufacturing sector) has been estimated using IIP of manufacturing. 

The advance estimates of IIP for the current year at 2-digit level is used to extrapolate the previous year’s value added estimates at 2-digit level, separately for the quasi corporate and household sectors. 

IIP manufacturing registered growth of 2.1 percent during April-October, 2017-18. The Wholesale Price Index (WPI), in respect of the manufactured products registered a growth of 2.6 percent during April-November, 2017-18.

Electricity, gas, water supply and other utility services

GVA at basic prices for 2017-18 from ‘Electricity, Gas, water supply and other utility services’ sector is expected to grow by 7.5 percent as compared to growth of 7.2 percent in 2016-17. Advance Estimate of IIP of Electricity compiled for 2017-18 has been used for compilation.

IIP of Electricity registered a growth rate of 5.3 percent during April-October, 2017-18.

Construction

GVA at basic prices for 2017-18 from ‘Construction’ sector is expected to grow by 3.6 percent as compared to growth of 1.7 percent in 2016-17. Key indicators of construction sector, namely, production of cement and consumption of finished steel registered growth rates of 0.6 percent and 4.2 percent respectively during April-November, 2017-18.