India's GDP estimated to grow at 6.5%, that's a four-year low

India's GDP estimated to grow at 6.5%, that's a four-year low

India's GDP estimated to grow at 6.5%, that's a four-year low

The growth in the agriculture, forestry and fishing sector is expected at a sluggish 2.1 per cent (as against 4.9 % growth recorded in 2016-17), while manufacturing is expected to grow at 4.6 % (as against 7.9 per cent in 2016-17). Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach), or by adding up what everyone spent (expenditure method).

The first advance estimates of GDP have made finance minister Arun Jaitley's budget math slightly more hard. The growth in the manufacturing sector is expected to be at 4.6% this year as against 7.9% in 2016-17.

"The growth in GDP during 2017-18 is estimated at 6.5 per cent as compared to the growth rate of 7.1 per cent in 2016-17", the Ministry of Statistics & Programme Implementation said in its estimate of National Income for 2017-18. The economy grew at 7.1% in 2016-17. This means that India's fiscal deficit is likely to be higher than budgetary estimate 3.2% for fiscal 2017-18.

Agriculture: The pace of agricultural expansion is expected to fall by more than half (from 4.9 per cent in the previous year to 2.1 per cent in FY18) due to decline in kharif output year-on-year. The CSO estimate is lower than the 6.7 pc growth forecast of the Reserve Bank of India.

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The data disclosed that sectors like public administration, defence and other services, trade, hotels, transport, communication and services related to broadcasting, electricity, gas, water supply and other utility services and financial, real estate and professional services registered a growth rate of over 7 per cent.

The GST collection council had cut rates for over 200 items in October and November, which might impact collections.

Businesses going into a "de-stocking" mode on inventories in anticipation of the GST rollout from July and sluggish manufacturing growth pulled down the Indian economy's growth during the first quarter of this fiscal to 5.7 per cent, clocking the lowest under the Narendra Modi dispensation. A year ago this sector had growth at 5.7%.

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