April-June GDP growth bounces to nine-quarter high of 5.7 per cent

The country's GDP for the first quarter of the current fiscal year beat estimates to grow 5.7 per cent, the highest in the last nine quarters. This is the first quarterly data that has been announced after the Narendra Modi -led National Democratic Alliance came to power in May this year.

GDP grew 4.6 per cent in the last quarter of the previous fiscal year ended March 2014. Growth in the corresponding quarter of the previous fiscal year was 4.7 per cent.
 
A Reuters poll of 40 economists had pegged GDP growth at 5.4 per cent for the first quarter ended June 30. Significantly, mining and manufacturing returned to growth in the quarter. The growth is also being attributed to the improved sentiment after Modi's victory.
 
"The growth is higher than expected. It is a good thing but it is a result of a low base effect. We can now comfortably see growth of five per cent or more for the rest three quarters and therefore the whole year too because of the base effect.

However, there is a concern that the impact of deficit rains on kharif output will impact demand in the festive season that begins in October," said Madan Sabnavis, Chief Economist at Care Ratings.
 
Chandrajit Banerjee, Director General of industry body CII , said that the sharp rise in GDP growth to 5.7 per cent, after remaining below five per cent for the last two years, reinforces faith in the India growth story.
 
He pointed out that the return of mining and manufacturing to the positive terrain and the strong uptick in the performance of the electricity and construction sectors is an encouraging trend.

The CII expects that quick and pro-active government policies would act as 'growth propeller', strengthen business confidence, and provide a stimulus to growth.