Economy on right track to accelerate: Bibek Debroy

The economy is on the right track to accelerate, said Dr Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister.

His statement came after the Ministry of Statistics and Programme Implementation on Wednesday released the Gross Domestic Product (GDP) data for the third Quarter (Q3).

Releasing the Q3 GDP figures, the Central Statistics Office (CSO) said the Q3 GDP growth rate is at 7.2 percent, which is up from Q2's 6.5 percent.

As per the CSO, "Real GDP or GDP at constant prices has reached Rs 32.50 lakh crore in Q3 2017-18 as against Rs 30.32 lakh crore in Q3 2016-17. The Real Gross Value Added (GVA), i.e, GVA at basic constant prices (2011-12) is expected to increase from 112.48 lakh crore in 2016-17 to 119.64 lakh crore in 2017-18."

Endorsing the uptick in the GDP growth numbers, Dr Bibek Debroy is of the view that the economy is in the right track to accelerate and the current expansion in the growth rate reflects that the reforms initiated by the government have started showing results.

"The growth will pick up more in the upcoming quarter driven by the government commitment to implement structural reforms and aided by higher growth in the industrial and services sector and central government spending," Dr. Debroy asserted.

He added that the GDP trends are consistent with the robust growth of the manufacturing Purchasing Manager's Index (PMI), Index of Industrial Production (IIP) and consumer demand.

"The IIP (Q-o-Q percent change) grew at 4.38 percent in December 2017 as compared to 0.50 percent in September 2017. The fast recovery in the economic indicators like IIP, PMI and consumer demand reflects a positive economic sentiment and India is on the right path to become one of the fastest major economies in the World surpassing China," the Economic Advisory Council Chairman said.

The released Q3 GDP figures say that anticipated growth of real GVA at basic prices in 2017-18 is 6.4 percent as against 7.1 percent in 2016-17.

The sectors which are likely to register growth rate of over seven percent are 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.

The growth in the agriculture, forestry and fishing, mining and quarrying, manufacturing, and construction is estimated to be 3 percent, 3 percent, 5.1 percent and 4.3 percent respectively.

The nominal Net National Income (NNI), also known as national income (at current prices) is likely to be Rs 148.40 lakh crore during 2017-18, as against Rs 134.93 lakh crore for the year 2016-17.

In terms of growth rates, the net national income registered a growth rate of 10 percent in 2017-18 as against the previous year's growth rate of 11 percent.