At this rate, the GDP growth was the lowest in three quarters, but still remained ahead of China. Thus, India still retained the tag of the world's fastest-growing major economy, reported news agency Press Trust of India. The GDP numbers were below a median estimate in a poll by news agency Reuters which had put the annual GDP growth at 7.4 per cent in the second quarter.
GDP at constant (2011-12) prices in the second quarter of 2018-19 is estimated at Rs. 33.98 lakh crore, as against Rs. 31.72 lakh crore in the corresponding quarter last year, according to an official statement.
The mining and quarrying output has declined by 2.4 per cent in the quarter from a growth of 6.9 per cent in year ago period.
The Reserve Bank of India has forecast an economic growth of 7.4 per cent for the financial year ending in March, recovering from 6.7 per cent in the previous year, the slowest in four years.
Experts were surprised with the downside in GDP numbers. "Second-quarter growth data has surprised us on the downside and pose downward risk to overall 7 percent+ GVA growth in FY19.
The second half of FY19 will likely see further slower growth on the back of unfavourable base effect and slower non-banking credit offtake and tighter financial conditions amid NBFC (non-banking financial company) stress," Madhavi Arora, Economist, Edelweiss Securities, was quoted as saying in a Reuters report.
"Numbers are below our expectations. Government expenditure has grown at a lower rate than what we had anticipated, the public administration and defence services part. Growth in the next two quarters could be slightly lower than this because you have an adverse base kicking in and then the NBFC (non-banking financial company) crisis.
Credit growth has been slow and passenger vehicle growth slipping. Most of these indicate that growth could even be slower in the second half of FY19," Teresa John, Economist, Nirmal Bang Institutional Equities, was quoted as saying in a report by news agency Reuters.(Agencies)
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