New Delhi: The Indian economy grew 7.7% during the period from January to March, topping the pace of the previous quarter for India to retain its position as the fastest growing major economy.
India surpassed China’s growth of 6.8% in the January to March quarter.
Growth for Asia’s third-largest economy, reported by the Ministry of Statistics, trumped forecasts in a Reuters poll for annual growth of 7.3 percent.
The ministry revised the October-December annual pace to 7.0% from the provisional 7.2% it reported earlier.
For the fiscal year that ended March 31, the ministry reported growth of 6.7%, down from 7.1% for a year earlier.
A faster pace of growth in manufacturing, at 9.1% compared with 6.1% a year ago, helped lift overall economic growth, alongside higher investments.
Thursday’s data is likely to be a welcomed by Prime Minister Narendra Modi, who is set to seek a second term next year.
To help businesses tide over multiple taxation, his government launched a nation-wide goods and services tax but a botched implementation of the GST nearly scuttled India’s growth prospects in the near term.
“Seems like we have moved beyond the teething troubles related to GST implementation,” said Tushar Arora, a senior economist at HDFC Bank. “The pick-up in investment activity is also a good sign.”
The faster pace of growth in the latest quarter might also strengthen expectations for a rate hike by the Indian central bank when it reviews monetary policy next week.About 40 percent of economists polled by Reuters expected a rate hike next week, driven by a higher inflation figure of 4.58% in April, above the Reserve Bank of India’s target of 4 percent for the sixth month in a row.
India’s fiscal deficit in the year ended March 2018 came in at 3.53% of gross domestic product, in line with the revised estimates, government data showed on Thursday.
India revised its fiscal deficit target in February to 3.5% of GDP from 3.2% of GDP for the 2017/18 fiscal year. For the current fiscal year, the government estimates to trim the deficit to 3.3 percent of GDP.
The shortfall for the 2017/18 fiscal year was 5.9 trillion rupees ($87.53 billion), the data showed.
New Delhi got 12.4 trillion rupees in net tax receipts during the fiscal year.