India's gross domestic product (GDP) growth rate slowed to 7.1 per cent in the July-September quarter, weakening from 8.2 per cent in the previous quarter, just as Prime Minister Narendra Modi-led central government gets set for the Lok Sabha elections next year. The rate of economic growth in the same quarter last year had been 6.3 per cent.
With this, India clocked its slowest GDP growth in three quarters, but still remained ahead of China to retain the tag of the world's fastest-growing major economy.
Quarterly GVA (basic price) at constant (2011-2012) prices for Q2 of 2018-19 was estimated at Rs 31.40 trillion, as against Rs 29.38 trillion in Q2 of 2017-18, showing a growth rate of 6.9 per cent over the corresponding quarter of previous year, an official government release said.
The economic activities that registered growth of over 7 per cent in Q2 of FY19 over Q2 of FY18 were manufacturing, electricity, gas, water supply & other utility services, construction, and public administration, defence and other services.
The growth in the agriculture, forestry and fishing, mining and quarrying, trade, hotels, transport, communication and services related to broadcasting, and financial, real estate and professional services was estimated to be 3.8 per cent, (-) 2.4 per cent, 6.8 per cent, and 6.3 per cent, respectively, during this period.
Though the rate of economic growth in the second quarter of 2018-19 looks respectable, a weakening trend could be a worrying sign, as the country needs a growth rate of over 8 per cent to generate enough jobs for the more than 12 million young Indians entering the labour force each year.
While there was consensus that the economic growth in the second quarter would not be as high as 8.2 per cent recorded in the April-June quarter, estimates had varied from 7.2 per cent to 7.6 per cent.
On Wednesday, the Central Statistics Office announced revised growth estimates that made the Modi administration's record look better than the previous Congress-led United Progress Alliance governments.
According to the new set of data, India's GDP grew at an average 6.7 per cent during the nine years of the UPA regime (2005-06 to 2013-14). By comparison, the average growth rate under the current National Democratic Alliance government stands at 7.3 per cent. GDP growth for all years prior to 2012-13 has been revised downwards.
Earlier in the day, the equity markets remained cautious ahead of the release of GDP growth numbers. Benchmark indices S&P BSE Sensex rose 24 points, or 0.1 per cent over previous close, to end at 36,194, and the broader Nifty50 settled at 10,877, up 18 points, or 0.2 per cent, higher than its previous close.