India's GDP growth slumps to three-year low of 5.7% in Q1

India's GDP growth slumps to three-year low of 5.7% in Q1

New Delhi, August 31, 2017

India's gross domestic product (GDP) growth slumped to a three-year low of 5.7 percent in the first quarter (Q1) (April-June) of 2017-18, as compared to 7.9 percent in the same period of the previous year, as the manufacturing sector slowed down ahead of the July 1 launch of the Goods and Service Tax (GST) amidst the effects of the November 8, 2016 demonetisation of Rs. 1000 and Rs. 500 bank notes.
The growth rate had dipped to 6.1 percent in the previous quarter -- the last quarter of 2016-17 -- and slowed down to 7.1 percent for 2016-17 as a whole as the effects of demonetisation took its toll on the economy.
The latest data also meant that India has lagged behind China for the second consecutive quarter. That country had registered a growth of 6.9% in both the January-March and April-June quarters.
The estimates of GDP for Q1 of 2017-18 released here today by the  Central Statistics Office (CSO), Ministry of  Statistics and  Programme Implementation, showed that GDP at constant (2011-12) prices in the quarter was estimated at Rs. 31.10 lakh crore, as against Rs. 29.42 lakh crore in Q1 of 2016-17, showing a growth rate of 5.7 percent. 
Quarterly GVA at basic price at constant (2011-2012) prices for Q1 of 2017-18 is estimated at Rs. 29.04 lakh crore, as against Rs. 27.51 lakh crore in Q1 of 2016-17, showing a growth rate of 5.6 percent over the corresponding quarter of the previous year.
An official statement, quoting the data, said the economic activities which registered growth of over 7 percent in Q1 of 2017-18 over Q1 of 2016-17 are ‘trade, hotels, transport & communication and services related to broadcasting’, ‘public administration, defence and other services’ and ‘electricity, gas, water supply & other utility services’. The growth in ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘manufacturing’,  ‘construction’  and  financial, insurance, real estate and professional services  is estimated to be 2.3%, (-) 0.7%, 1.2%, 2.0% and 6.4%, respectively, during this period.
 The statement said quarterly GVA at basic prices for Q1 2017-18 from ‘agriculture, forestry and fishing’ sector grew by 2.3% as compared to growth of 2.5% in Q1 2016-17. According  to  the  information furnished by  the  Department  of  Agriculture  and Cooperation  (DAC),  which  has been  used  in  compiling  the  estimate  of  GVA from agriculture in Q1 of 2017-18, the production of rice, wheat, coarse cereals and pulses registered growth rates of 5.8%, 6.6%, 10.7% and 25.0%, respectively, during  the  Rabi  season of  agriculture year 2016-17 (which ended in June 2017). Among the commercial crops, the production of oilseeds registered a growth of 13.1% during the Rabi season of 2016-17. The crops including fruits and vegetables account for about 56.9% of GDP in ‘agriculture, forestry and fishing’ sector.  Around 43.1% of GVA of this sector is based on the livestock products, forestry and fisheries, which registered a combined growth of about 3.4% in Q1 of 2017-18.
Quarterly GVA at basic prices for Q1 2017-18 from ‘mining and quarrying’ sector grew by (-) 0.7% as compared to growth of (-) 0.9% in Q1 2016-17.  The key indicators of mining sector, namely, production of coal, crude oil and natural gas and IIP mining registered growth rates of (-) 4.4%, 0.2%, 4.0% and 1.2%, during Q1 of 2017-18 as compared to 5.3%, (-) 3.3%, (-) 6.0% and 7.5% during Q1 of 2016-17.   
Quarterly GVA at basic prices for Q1 2017-18 from ‘manufacturing’ sector grew by 1.2% as compared to growth of 10.7% in Q1 2016-17.   The private corporate sector growth (which has a share of over 75% in the manufacturing sector) as estimated from available data of listed companies with BSE and NSE is (-) 0.9% at current prices during Q1 of 2017-18 as against 10.2% in Q1 of 2016-17. The quasi corporate and unorganized segment (which has a share of over 20% in the manufacturing sector) has been estimated using IIP of manufacturing. IIP manufacturing registered growth rate of 1.8% during Q1 of 2017-18 as compared to 6.7% during Q1 of 2016-17.
Quarterly GVA at basic prices for  Q1 2017-18 from ‘Electricity, Gas, water supply and other utility services’  sector  grew by 7.0% as compared to growth of 10.3% in Q1 2016-17.  The key indicator of this sector, namely, IIP of electricity registered growth rate of  5.3% during Q1 of 2017-18 as compared to 10.0% in Q1 of 2016-17.
Quarterly GVA at basic prices for Q1 2017-18 from ‘Construction’ sector grew by 2.0% as compared to growth of 3.1% in Q1 2016-17.  Key indicators of construction sector, namely, production of cement, consumption of finished steel and IIP of non-metallic minerals registered growth rates of (-) 2.9%, 4.6% and (-) 3.2%, respectively, during Q1 of 2017-18 as compared to 5.8%, 1.3% and 5.7%, respectively, in Q1 of  2016-17.
Quarterly GVA at basic prices for Q1 2017-18 from trade, hotels, transport, communication and services related to broadcasting grew by 11.1% as compared to growth of 8.9% in Q1 2016-17. Key indicator used for estimating GVA from trade sector is the sales tax growth.  As per the available monthly data on State accounts available from CAG website, sales tax collection grew by 16.9% during Q1 of 2017-18. Among the other services sectors, the key indicators of railways, namely, the net tonne kilometers and passenger kilometers have shown growth rate of 3.3% and 1.5%, respectively, during Q1 of 2017-18.  In case of other transport sectors, passengers handled by civil aviation, cargo handled by civil aviation and cargo handled at major ports registered growth rates of 15.6%, 19.2% and 5.0%, respectively, during Q1 of 2017-18. Sales of commercial vehicles registered (-) 9.1% growth during Q1 of 2017-18.
Quarterly GVA at basic prices for Q1 2017-18 from the financial, insurance, real estate and professional services sector grew by 6.4% as compared to growth of 9.4% in Q1 2016-17.  Major component of this industry is the real estate and professional services which has a share of 73.1%. The key indicators of this sector are the quarterly growth of corporate sector for computer related activities which as estimated from available data from listed companies at current prices is 6.2% during Q1 of 2017-18. The other indicators of this sector, viz., aggregate bank deposits, and bank credits have shown growth rates of 13.3% and 8.6%, respectively as on June 2017.
Quarterly GVA at basic prices for Q1 2017-18 from the public administration, defence and other services sector grew by 9.5% as compared to growth of 8.6% in Q1 2016-17. The key indicator of this sector namely, Union Government revenue expenditure net of interest payments excluding subsidies grew by 19.8% during Q1 of 2017-18 as compared to 20.8% in Q1 of 2016-17.
The statement said GDP at current prices in Q1 of 2017-18 is estimated at Rs. 38.84 lakh crore, as against Rs. 35.55 lakh crore in Q1 of 2016-17, showing a growth rate of 9.3%. GVA at basic price at current prices in Q1 of 2017-18, is estimated at Rs. 35.77 lakh crore, as against Rs. 33.17 lakh crore in Q1, 2016-17, showing an increase of 7.9%. Growth in collection of Union excise duties, customs duties and service tax was 7.3%, 15.0% and 20.4%, respectively, in Q1 of 2017-18 as against 60.5%, 17.8% and 28.5%, respectively, in Q1 of 2016-17.
The statement said the wholesale price index (WPI), in respect of the groups - food articles, minerals, manufactured products, electricity and all commodities, had risen by (-) 1.7%, 5.5%, 2.6%, 0.7% and 2.3%, respectively, during Q1 of 2017-18 over Q1 of 2016-17. The Consumer Price Index (CPI) has shown a rise of 2.2% during Q1 of 2017-18 over Q1 of 2016-17.
Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs. 22.27 lakh crore in Q1 of 2017-18 as against Rs. 20.42 lakh crore in Q1 of 2016-17.  At constant (2011-12) prices, the PFCE is estimated at Rs. 16.80 lakh crore in Q1 of 2017-18 as against Rs. 15.76 lakh crore in Q1 of 2016-17. 
In terms of GDP, the rates of PFCE at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 57.3% and 54.0%, respectively, as against the corresponding rates of 57.4% and 53.6%, respectively, in Q1 of 2016-17.
Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs. 5.19 lakh crore in Q1 of 2017-18 as against Rs. 4.34 lakh crore in Q1 of 2016-17. At constant (2011-2012) prices, the GFCE is estimated at Rs. 3.91 lakh crore in Q1 of 2017-18 as against Rs. 3.34 lakh crore in Q1 of 2016-17. In terms of GDP, the rates of GFCE at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 13.4% and 12.6%, respectively, as against the corresponding rate of 12.2% and 11.3%, respectively in Q1 of 2016-17.
Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs. 10.69 lakh crore in Q1 of 2017-18 as against Rs. 10.37 lakh crore in Q1 of 2016-17. At constant (2011-2012) prices, the GFCF is estimated at Rs. 9.28 lakh crore in Q1 of 2017-18 as against Rs. 9.13 lakh crore in Q1 of 2016-17. In terms of GDP, the rates of GFCF at current and constant (2011-2012) prices during Q1 of 2017-18 are estimated at 27.5% and 29.8%, respectively, as against the corresponding rates of 29.2% and 31.0%, respectively in Q1 of 2016-17.
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