GDP growth rebounds to 6.3%, fiscal deficit and agriculture remain a concern

Economic growth seems to have halted its five-quarter slide, rebounding to 6.3 per cent in the second quarter (July to September) of 2017-18 from 5.7 per cent in the preceding quarter. But the government’s account, the fiscal deficit, remains in poor shape.

The fiscal deficit at the end of October hit 96.1 per cent of the full-year budget estimate for 2017-18, mainly due to lower revenue collections and rise in expenditure, according to a report in The Indian Express.

The improvement in economic growth appears to be despite teething GST troubles and primarily driven by higher growth in manufacturing.

The gross value added to the economy in the reporting quarter stood at 6.1 per cent, up from 5.6 per cent in the last quarter.

However, the growth rate for “agriculture, forestry and fishing” sector slowed down to 1.7 per cent from 2.3 per cent in the previous quarter and 4.1 per cent growth in the second quarter last year, the report said, quoting data from Central Statistics Office.

An elated finance minister Arun Jaitley said “perhaps the impact of demonetisation and GST is behind us”. “(The) most significant aspect is the fact that this quarter’s positive result has been impacted significantly by the growth in manufacturing… fixed capital formation is up to 4.7 (per cent), which actually means investment is moving upwards. Hopefully, we should go back to higher growth rates in coming quarters,” he was quoted as saying.