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Third quarter GDP at 7.3%, CSO expects 7.6% growth in 2015-16

09 Feb 2016 Evaluate

India’s economic growth for the third quarter of this financial year slowed to a four-quarter low at 7.3 percent, from the revised 7.7 percent of the previous quarter. It, however bettered the 6.6 percent in the same period of the last fiscal. Growth in gross fixed capital formation, a proxy for investment, fell significantly in the third quarter, compared to the second, because of lacklustre private investments.

However, the Central Statistics Office (CSO) is still bullish on the Indian growth story and has said that Gross domestic product (GDP) will expand by 7.6 percent in 2015-16 compared with 7.2 percent a year earlier, overtaking a slowing China, on the back of improvement in manufacturing and farm sectors. The CSO's estimate is higher than the Finance Ministry's mid-year economic analysis, which projected a growth rate of 7-7.5 percent for the current fiscal. It is also higher than 7.4 percent estimated by the Reserve Bank of India. To meet the revised figure of 7.6 percent growth in the entire current year, the GDP has to increase by 7.8 percent in the last quarter. The CSO said in its statement that performance of the corporate sector during April-December 2015 has also been taken into account while compiling advance estimates.

Nominal GDP is estimated to grow 8.6 percent  in the full year to March. For 2015-16, the Gross Value Added (at basic prices) is estimated to grow 7.3 percent as against 7.1 percent in 2014-15.  The sectors which are likely to register growth rate of over 7 percent are ‘financial, real estate and professional services’, ‘trade, hotels, transport, communication and services related to Broadcasting’ and manufacturing. The growth in ‘agriculture, forestry and fishing’ and ‘mining and quarrying’ is estimated to be 1.1 percent and 6.9 percent, respectively. While electricity generation is expected to slow down to 5.9 percent  in 2015-16 from 8 percent  a year ago due to lower demand from state distribution companies, the job-creating construction sector is also set to decelerate to 3.7 percent  in FY16 from 4.4 percent in the previous year.

The CSO data also showed that India's per capita income during 2015-16 is likely to grow by 6.2 percent to Rs 6,452.58 per month. The per capita income in real terms (at 2011-12 prices) during 2015-16 is likely to attain a level of Rs 77,431 as compared to Rs 72,889 for the year 2014-15. Also, the per capita net national income during 2015-16 is estimated to be growing at 7.3% to Rs 7,769.25 per month as against Rs 7,239.92 per month in the previous fiscal.

The per capita net national income during 2015-16 is estimated to be Rs 93,231, showing a rise of 7.3 percent, as compared to Rs 86,879 during 2014-15 with the growth rate of 9.4 percent. The CSO has estimated national income or the nominal net national income (at current prices) at Rs 119.62 lakh crore during 2015-16, as against Rs 110.08 lakh crore for 2014-15.

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