New Delhi: India’s economy grew at 7.6% in 2015-16 as estimated earlier, with the gross domestic product (GDP) growing at a robust 7.9% in the last quarter.
The Central Statistics Office (CSO) revised the GDP data for the first three quarters released earlier from 7.6%, 7.7% and 7.3% to 7.5%, 7.6% and 7.2%, respectively.
Growth of “agriculture, forestry and fishing” sector was marginally revised upwards to 1.2% in 2015-16 as against 1.1% in the advance estimates during the same period. “The upward revision is on account of use of third advance estimates of crop production released by the Ministry of Agriculture,” the CSO said.
The growth of the manufacturing sector was revised downward to 9.3% as against the growth rate of 9.5% estimated earlier due to lower print of factory output than assumed.
“The IIP of manufacturing registered a growth rate of 2% during the whole year of 2015-16, as against the growth rate of 3.9% used for compiling Advance Estimates. Due to this change, the Advance estimate growth of ‘manufacturing’ sector has been revised downwards to 9.3%,” it added.
Growth of trade, hotels, transport, communication services has been revised downward to 9% against 9.5% estimated earlier, while financial, insurance and real estate sector grew at 10.3%, same as projected earlier.
While the Economic Survey has projected the economy to grow within a wide band of 7-7.75% in 2016-17, boosted by normal monsoon projection by the Indian Meteorological Department, finance minister Arun Jaitley has expressed hopes of the economy growing over 8% in the year.
However, the Survey has cautioned that with the global slowdown likely to persist, chances of India’s growth rate in 2016-17 increasing significantly beyond 2015-16 levels are not very high. “The wider range in the forecast this time reflects the range of possibilities for exogenous developments, from a rebound in agriculture to a full-fledged international crisis; it also reflects uncertainty arising from the divergence between growth in nominal and real aggregates of economic activity,” it said.
With tepid external demand failing to provide a boost to the economy, domestic demand has also not picked up. However, the implementation of the 6th Pay Commission report—which is waiting for approval from a committee of secretaries—could provide a boost to domestic demand for consumer goods, by putting more money into the pockets of India’s 4.8 million central government employees and 5.5 million pensioners.
The Reserve Bank of India (RBI) in its monetary policy review in April said a number of factors could impinge upon the growth outlook for 2016-17 such as slow investment recovery amid balance sheet adjustments of companies, weak revival of private investment demand and tepid external demand.
“On the positive side, the government’s “start-up” initiative, strong commitment to fiscal targets, and the thrust on boosting infrastructure could brighten the investment climate. Household consumption demand is expected to benefit from the Pay Commission award, continued low commodity prices, past interest rate cuts, and measures announced in the Union Budget 2016-17 to transform the rural sector,” it added.