2014 wishlist: Economy breathes easy at 7% GDP growth

A wishlist of all the news we would like to print in 2014

The first quarter of 2014-15 has seen India’s gross domestic product (GDP) growing by seven per cent, indicating a sharp revival in the economy. 

After several quarters of growth languishing at less than five per cent, data released by the Central Statistics Office show that the manufacturing sector sprang back to a growth rate of over three per cent, from a decline in output for the previous three quarters.

Consequently, industrial output recorded growth of over four per cent in the first quarter.

The Bombay Stock Exchange’s benchmark index, the Sensex, notched up a 500 point gain following the announcement of the GDP growth data. It appeared that the government had got wind of the positive trend in the GDP numbers and decided to advance the time of releasing the data so that market sentiment improved to strengthen the feel-good factor in the economy.

 The sharp recovery in the first-quarter GDP numbers bodes well for the economy, making forecasts for 2014-15 look more realistic. Deputy Chairman of Planning Commission Montek Singh Ahluwalia, an optimist even when the economy was going through a rough patch , had predicted growth of 7.5 to eight per cent, irrespective of the political party or alliance in power in May 2014.

India’s growth rate in the past decade rose to around nine per cent. However, after the 2008 financial crisis, the annual growth rate fell to six per cent in the following two years and to less than five per cent in 2012-13.