India's economy grows by 7.4 percent in second quarter

Published: November 30, 2015
India's growth rate for the year ended March 31, 2015 was slightly lower than the government's own forecast of 7.4 percent. PHOTO: AFP

India's growth rate for the year ended March 31, 2015 was slightly lower than the government's own forecast of 7.4 percent. PHOTO: AFP

MUMBAI, INDIA: India’s economy grew by 7.4 percent in the second quarter, official figures showed on Monday, outperforming China and slightly ahead of analysts’ expectations.

Growth in the three months to the end of September quickened to 7.4 percent year-on year from 7.0 percent in the previous quarter, according to statistics ministry data.

The figures for the second quarter of the financial year were marginally higher than the median forecast of 7.3 percent in a survey of economists by Bloomberg News.

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They also bettered China’s 6.9 percent increase in Gross Domestic Product (GDP) recorded for the same period and reported by Beijing last month.

The figures are a boost for Indian Prime Minister Narendra Modi and his ruling party which suffered a drubbing at a key state election earlier this month.

Modi has made boosting economic growth a priority since sweeping to power in a general election in May 2014 and India has now recorded three straight quarters of growth above seven percent.

But investors have raised concerns about the pace of promised economic reform needed to create jobs for India’s tens of millions of young people.

Investors are hoping Modi’s government will be able to reach a consensus with opposition parties and push reforms through the current session of parliament, including one that paves the way for a long-awaited national sales tax.

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The positive data makes it likely Reserve Bank of India governor Raghuram Rajan will choose to keep interest rates unchanged when the central bank holds its monetary policy review meeting on Tuesday.

Monday’s numbers were the latest growth data to be released since the government introduced a revised formula for calculating GDP that some analysts have criticised.

India’s government changed the way it calculates GDP in January, saying the new method was closer to international standards.

The main change is that India now measures its economic growth at market prices to incorporate “gross value addition” in goods and services as well as indirect taxes.

The base year to calculate India’s GDP has also been advanced to 2011-12 from 2004-05.

But analysts say the new data does not correlate with some other economic indicators, including last year’s industrial production figures and corporate profits.

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Reader Comments (9)

  • parkash
    Nov 30, 2015 - 6:18PM

    People have not enough toilets and enough food yet great urge to buy mobile phones which makes economy grow at this level.This is non productive growth that is why poverty level remains the same.Recommend

  • ali
    Nov 30, 2015 - 9:31PM

    Cooked up numbers to boost MODI failure..USA/Euro/China/Japan slow yet India up…very fishy..Recommend

  • Insaaf
    Dec 1, 2015 - 12:35AM

    As a Pakistani, I find this news deeply disturbing and depressing.Recommend

  • Khurram
    Dec 1, 2015 - 2:22AM

    At this rate it looks like we’ll be soon begging for loans and aid money from India rather than China or USA. Any one who is not realizing the ever widening gap between the countries is living in fool’s paradise. Recommend

  • tkm
    Dec 1, 2015 - 6:08AM

    brother ali, feeling happy. Recommend

  • Dinesh Dutta
    Dec 1, 2015 - 6:59AM

    @ali: Yet hard to digest for Pakis as India’s economy is 10 times larger than Pakistan.Recommend

  • bharat
    Dec 1, 2015 - 9:03AM

    Indian economy has now surpassed China to become the fastest growing major economy in the world. This will have far reaching consequences on the whole world Recommend

  • Insaaf
    Dec 2, 2015 - 2:25AM

    @bharat: Sorry to burst your bubble but its only the growth rate that has surpassed China this quarter. Not the economy my friend. China’s economy is 2nd largest, India is way behind.Recommend

    Dec 11, 2015 - 12:07AM

    I wish to clarify why you find the data as a Pakistani disappointing, when after-all more India grows the more we could invest in your country’s infrastructure if the political environment on both sides is favourable. Recommend

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