The GDP growth in the first half of the financial year, April-September, stands at 5.5 per cent as against 4.9 per cent in the corresponding period last year. The September quarter registered a growth of 5.3 per cent, show data released by the Central Statistics Office on Friday.
Growth in government consumption expenditure during the quarter reflected in the pick-up in community and social services growth that surged from 9.1 per cent to 9.6 per cent.
Agriculture performed better than expected even in the face of a lower kharif output and decreasing acreage cultivation. Farm sector growth slipped only to 3.2 per cent from 3.8 per cent. Mining and quarrying growth slowed to 1.9 per cent from 2.1 per cent. Electricity, gas and water supply growth was down to 8.7 per cent from 10.2 per cent.
Financial and real estate services growth too fell to 9.5 per cent from 10.4 per cent.
Call for reformsNoting the steep decline in manufacturing, industry chambers made a call for reforms and pro-investment policies.
“The Confederation of Indian Industry [CII] notes a moderate decline in GDP growth over the previous quarter owing to a steep decline in manufacturing output … But this does not alter the fact that the economy is on the road to recovery as compared to the previous year,” said CII director-general Chandrajit Banerjee.
He recommended that the Centre roll out proactive policies which would help revive investments and address the bottlenecks plaguing the agriculture and industrial sectors, a stable and predictable taxation system, faster regulatory clearances and industry-friendly land acquisition and labour laws.
While the growth in agriculture and services sector is in line with expectations, the subdued growth in manufacturing at 0.1 per cent is a matter of concern, said FICCI president Sidharth Birla in a statement issued here.
Interest rates crucial“We look forward to further action on all the pending reforms including early introduction of the goods and services tax, changes to the Land Acquisition Act and further reforms in labour laws. An important element of the cost structure for manufacturing is interest rates and given the current inflation situation the RBI should ease the monetary policy stance,” Mr. Birla said.
“Going forward, while trends in bank credit, tax collections and non-oil non-gold imports remain weak, the reform momentum post the Assembly polls, improving liquidity conditions and project clearances prompt us to retain our full-year growth estimate of 5.6 per cent for 2014-15,” said Citi India chief economist Rohini Malkani in a report.
