The Indian economy grew at 15-quarter high of 8.2 per cent in the first quarter of the current Financial Year from April to -June spurred by agriculture and manufacturing sectors, says an official statement released on Friday in Delhi. The world’s second populous nation has strengthened its status as the world’s fastest growing major economy surprising and overtaking its neighbour China. Macroeconomists claim households are buying more and companies are adding capacities despite doomsayers predicting that India would never be able to absorb the shock of demonetisation and the Goods & Services Tax across the country. Manufacturers of tractors for rural areas and personalised vehicles are not much impacted by the twin major economic reforms –Demonetisation and GST, say chambers of commerce as Dalal Street by and large remains bullish reflecting that Indian economy is not in as a bad shape as it is being projected in some quarters. India will become the world’s fifth largest economy ahead of the United Kingdom, says a beaming Finance Minister Arun Jaitley, a successful layer turned politico. Earlier, United States headquartered World Bank data had released date saying India edged past France to become the world’s sixth largest economy. India’s GDP stood at USD 2.597 trillion (Rs 178 lakh crore) in 2017 in current prices in market exchange rates, ahead of France whose GDP stood at USD 2.582 trillion (Rs 177 lakh crore) in 2017.
Gross domestic product (GDP) had earlier grown by 7.7 per cent in Q4FY18. “Investments will continue to look up (driven by government-led efforts to get roads and houses built), but a broad-based investment recovery led by the private sector is hampered by capacity overhang, high leverage, and political uncertainty,” said Joshi. While the growth numbers for the first quarter are encouraging, analysts remain sceptical about the economy maintaining this growth trajectory in the coming quarters.“We expect growth to be 7.5 per cent for the full year. Given the challenges of higher interest rates, a weak rupee, oil price concerns, etc, we may expect some moderation in growth in the next few quarters. ” .With China’s growth coming down to 6.7 per cent in April-June 2018 from 6.8 per cent in January-March of the year, India remained the fastest-growing large economy in the world. Manufacturing sector grew at a nine-quarter high of 13.5 per cent largely owing to a low base effect while the services sector expanded at a slower pace. However, economists however remain sceptical of sustaining the growth momentum in the coming quarters. But FM Jaitley and his team in the North Bloc, expect even its projections of up to 7.5 per cent growth in FY19 may be crossed.Jaitley tweets “More India’s GDP for the first quarter this year growing at 8.2 per cent in otherwise an environment of global turmoil represents the potential of New India.”On the expenditure side, the economy was driven by domestic demand. Jaitley said: “Reforms and fiscal prudence are serving us well. India is witnessing an expansion of the neo middle class.”Economic Affairs Secretary Subhash Chandra Garg said the robust performance this quarter gave hope that growth could exceed even estimates of 7.5 per cent this fiscal year .He said the V-shaped recovery of growth in the Indian economy was complete now. “We should grow at a robust and steady state in 2018-19, remaining the fastest-growing economy in the world,” he said. Part of the spurt in growth can be traced to a low base effect as the economy was held back by the twin shocks of the GST and demonetisation in the previous year.Manufacturing had contracted by 1.8 per cent in Q1FY18 as companies resorted to de-stocking ahead of the shift to the GST as he said rightly.