India’s Q2 economic growth rises on upbeat service sector performance, high consumer demand

Economic growth in India during the second quarter of fiscal year 2017 rose, albeit lower than market expectations, following upbeat performance in the service sector, the country’s major contributor to gross domestic product. Also, higher consumption demand added to the rise.

GDP at constant (2011-12) prices in Q2 of 2016-17 is estimated at ` 29.63 lakh crore, as against `27.62 lakh crore in Q2 of 2015-16, showing a growth rate of 7.3 percent. Quarterly GVA at basic price at constant (2011-12) prices for Q2 of 2016-17 is estimated at `27.33 lakh crore, as against `25.52 lakh crore in Q2 of 2015-16, showing a growth rate of 7.1 per cent over the corresponding quarter of previous year, data released by the Ministry of Statistics and Programme Implementation showed Wednesday.

The economic activities which registered growth of over 7.0 percent in Q2 of 2016-17 over Q2 of 2015-16 are ‘Public administration, defence & other services’, 'financial, insurance, real estate and professional services', ‘manufacturing’ and ‘trade, hotels and transport & communication and services related to broadcasting’.

Further, the growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘electricity, gas, water supply & other utility services, and ‘construction’ is estimated to be 3.3 per cent, (-)1.5 percent, 3.5 per cent and 3.5 per cent respectively, during this period.

Gross value added for agriculture, fishing and industry grew by 3.3 percent as compared to growth of 2.0 percent in Q2 2015-16. According to the information furnished by the Department of Agriculture and Cooperation (DAC), the production of food grains during the Kharif season of agriculture year 2016-17 was 8.9 percent as compared to decline of 3.2 percent during the same period in 2015-16.

Meanwhile, the USD/INR currency pair remained bearish at 68.50, down 0.16 percent at the time of closing on the National Stock Exchange.