Dragged down by weak manufacturing, Indian economy grew at 5.3% in July-September quarter of 2014-15 as against 5.7% in the previous quarter, but better than street estimates of around 5% growth. According to data released by the Central Statistics Office (CSO), the economic growth in first half (April-September) of this fiscal stood at 5.5% as compared to 4.9% in the same period in 2013-14. The better than expected numbers were on account of improved performance of mining, power and certain services sectors. The mining sector grew by 1.9% in July-September quarter compared a flat output in same period year-ago. During the first six months of the fiscal, the sector grew by 2% compared a contraction of 2 per cent in corresponding period of 2013-14.
However, manufacturing sector recorded a modest growth of 0.1% in the second quarter of 2014-15, as against a growth of 1.3% in same period of 2013-14. During April-September period, the sector grew by 1.8% compared to a growth of 0.1% in first half of previous fiscal.
Furthermore, the farm sector, which includes agriculture, forestry and fishing, recorded deceleration in growth at 3.2% in second quarter compared to 5%a year ago. During April-September, the sector grew by 3.5% compared to 4.5% in the same period a year ago.
Meanwhile, Electricity, gas and water supply segment grew by 8.7% in second quarter compared to 7.8% in same period last year. During first half of this fiscal, the segment grew by 9.5% compared to 5.8% in six month period of 2013-14.
The community, social and personal services sector grew at 9.6% in second quarter compared to 3.6% in the same period last year. During April-September, the segment grew by 9.4 per cent compared to 6.8 per cent in the six month period of 2013-14. According to the data, the financial services sector grew at 9.5% in second quarter compared to 12.1 per cent in July-September last year. During April-September, the segment grew by 10% compared to 12.5% in first of half of previous fiscal. Importantly, construction sector expanded 4.6% in second quarter of this fiscal as against 4.4% growth in the year-ago period. In April-September, the sector grew by 4.7% compared to a growth of 2.7% in the first half of previous fiscal.
Investments seem to have rebounded with investment activity rising at steady pace and reassured consumers have begun to spend again, indicating the worst slowdown in the last decade may finally be over. Gross Fixed Capital Formation (GFCF), a barometer of investment at current prices is estimated at Rs 8.28 lakh crore in second of this fiscal as against Rs 7.94 lakh crore in second quarter of 2013-14. At constant (2004-05) prices, the GFCF is estimated at Rs 4.98 lakh crore in second quarter of this fiscal as against Rs 4.97 lakh crore in second quarter of 2013-14.
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