Domestic rating agency Care Ratings, in its latest report has projected acceleration in the Gross Domestic Product (GDP) growth to 6.5% in the first quarter (April-June) of fiscal year 2017-18 over the last year, up from the 6.1% in the preceding quarter. It said that this growth is contingent on realisation of gross value added (GVA) growth of 6.3%.
The rating agency in its report titled ‘GDP growth: Q1-FY18 Expectations’ has stated that agriculture is expected to grow at 3.5-4% during the reporting quarter, largely due to residual output of the Rabi or the winter crop harvest. It said that the value addition in manufacturing will come between 4.5% and 5%, and added that the index of industrial production is at a positive 1.25% for the same period. It also said electricity growth will be 7%, while mining will be up to 3%. Growth of trade, hotels and transport will be around 7% with prospective GST impacting services to a limited extent.
As per the report, the fastest growing segment will be public administration and defence which is expected to grow 12%, on the back of front-loading of spending by the government wherein 80% of the budgeted fiscal space has already been exhausted. Following the push by government in terms of increased spending on infrastructure, the construction segment is projected to grow at 6% on a GVA basis. Besides, the ratings agency also said that the real estate sector is ‘sluggish’ due to the introduction of a regulatory machinery and estimated that the segment to report a growth of 6.5% during the quarter.
