India's GDP grows at 7.1% in Q1 of FY17, the slowest in 5 quarters

India's economic growth slowed sharply to 7.1 per cent in the April-June quarter, making the government's target of 8.0 per cent a distant dream and raising concerns that the economy is not yet out of the slow track.

At 7.1 per cent growth in India's gross domestic product (GDP) for the April-June 2016-17 quarter is way down from 7.9 per cent in the preceding three months and is the slowest in five quarters.

Growth was dragged down by a contraction in mining and a sluggish farm sector.

India's gross domestic product (GDP) at constant (2011-12) prices expanded at 7.1 per cent in the first quarter of the current fiscal (April-June 2016-17) at an estimated Rs29,17,000 crore, against Rs27,24,000 crore in Q1 of 2015-16, figures released by the Central Statistics Office (CSO) showed.

Gross value addition (GVA) at constant (2011-2012) prices for Q1 of 2016-17 is estimated to have grown at a faster rate of 7.3 per cent to Rs27,38,000 crore, against Rs25,51,000 crore in Q1 of 2015-16, showing a growth rate of 7.3 per cent over the corresponding quarter of previous year.

During the quarter almost all economic activities , including 'manufacturing', 'electricity,  gas, water supply and other utility services', 'trade, hotels, transport and communications and services related to broadcasting', 'financial, insurance, real estate and professional services' and 'public administration, defence and other services' recorded growth rates of over 7 per cent in Q1 of 2016-17 over Q1 of 2015-16.

The growth the 'agriculture, forestry and fishing', 'mining and quarrying', and 'construction' sectors is estimated to be 1.8 per cent, (-) 0.4 per cent, and 1.5 per cent, respectively, during the quarter.

Performance of key sectors like transport, including railways, road, air and water transport etc, communication, banking and insurance during the period April-June 2016-17 have also been taken into account while compiling the estimates.

Performance of the corporate sector during April-June 2016-17 based on data received from BSE / NSE have been taken into account.

CSO said the estimated growth in the corporate sector indicator has been compiled on the basis of employee expenses, profit before tax and depreciation of listed companies deflated by appropriate price indices.

Quarterly GVA at basic prices for Q1 2016-17 from 'agriculture, forestry and fishing' sector grew 1.8 per cent compared with a growth of 2.6 per cent in Q1 of 2015-16.

Quarterly GVA at basic prices for Q1 2016-17 from 'mining and quarrying' sector grew by (-) 0.4 per cent against a growth of 8.5 per cent in Q1 of 2015.

Quarterly GVA at basic prices from 'manufacturing' sector for Q1 of 2016-17 grew 9.1 per cent against a growth of 7.3 per cent in Q1 2015-16.

Growth in private corporate sector output (which has a share of over 75 per cent in the manufacturing sector), based on available data of listed companies with BSE and NSE, is estimated at 11.9 per cent at current prices during Q1 of 2016-17 against 5.5 per cent in Q1 of 2015-16.

The quasi corporate and unorganised segment (which has a share of over 20 per cent in the manufacturing sector) has been estimated using IIP of manufacturing. IIP manufacturing registered growth rate of (-) 0.7 per cent during Q1 of 2016-17.

Quarterly GVA at basic prices from 'electricity, gas, water supply and other utility services'  grew by 9.4 per cent against a growth of 4.0 per cent in Q1 of 2015-16.

Quarterly GVA at basic prices from 'construction' sector for the April-June 2016-17 quarter grew by 1.5 per cent against a growth of 5.6 per cent in Q1 of 2015-16.
 
Quarterly GVA at basic prices from trade, hotels, transport, communication and services related to broadcasting grew by 8.1 per cent against a growth of 10 per cent in Q1 2015-16.

Quarterly GVA at basic prices for the `financial, insurance, real estate and professional services' sector for Q1 of 2016-17 grew 9.4 per cent against a growth rate of 9.3 per cent in Q1 of 2015-16.

Quarterly GVA at basic prices from the `public administration, defence and other services' sector grew 12.3 per cent against a growth of 5.9 per cent in Q1 2015-16.

GDP at current prices (which is derived by adding taxes on products net of subsidies on products to GVA at basic prices) has shown a growth of 10.4 per cent at Rs35,05,000 crore in Q1 of 2016-17, against Rs31,75,000 crore in Q1 of 2015-16.

GVA at Basic Price at current prices in Q1 of 2016-17, is estimated at Rs33.00,000 crore, against `Rs0,02,000 crore in Q1 of 2015-16, showing an increase of 9.9 per cent.

Growth in collection of central excise duty, custom duty and service tax stood at 61 per cent, 18 per cent and 29 per cent, respectively, in Q1 of 2016-17  against 104 per cent, 22 per cent and 14.2 per cent in Q1 2015-16.

Major subsidies grew by 53 per cent in Q1 of 2016-17 against a decline of 26 per cent in Q1, 2015-16.

The wholesale price index (WPI) has risen by 7.0 per cent in Q1 of 2016-17 while the consumer price index has shown a rise of 5.7 per cent during the quarter.