India’s GDP grows at a slower-than-expected 7.3% in Q2

India's economy grew at slower-than-expected 7.3 per cent in the fiscal second quarter, but slightly higher than the GDP growth rate recorded in the three months ended September 2015, official data released on Wednesday showed.

Gross domestic product (GDP) in the world's fastest-growing major economy at constant (2011-12) prices in Q2 of 2016-17 is estimated at Rs29,63,000 crore against Rs27,62,000 crore in Q2 of 2015-16, showing a growth rate of 7.3 per cent. 

Quarterly GVA (gross value added) at basic price at constant (2011-12) prices for Q2 of 2016-17 is estimated at Rs27,33,000 crore, against Rs25,52,000 crore in Q2 of 2015-16, showing a growth rate of 7.1 per cent over the corresponding quarter of the previous year.

The economic activities which recorded growth rates of over 7.0 per cent in Q2 of 2016-17 included 'public administration, defence and other services', 'financial, insurance, real estate and professional services', 'manufacturing' and 'trade, hotels and transport and communication and services related to broadcasting'.

Growth rates in the 'agriculture, forestry and fishing', 'mining and quarrying', 'electricity, gas, water supply and other utility services, and 'construction' are estimated at 3.3 per cent, (-) 1.5 per cent, 3.5 per cent and  3.5 per cent, respectively, during this period.

The GDP estimates are also based on the performance of key indicators of sectors like transport, including railways, road, air and water transport, communication, banking and insurance during July-September 2016.

Corporate sector performance during July-September 2016 based on data received from BSE/NSE has also been taken into account, the Indian Statistics Office (ISO) said in its release.

Quarterly GVA at basic prices for Q2 of 2016-17 from 'agriculture, forestry and fishing' sector grew 3.3 per cent compared to a growth of 2.0 per cent in Q2 of 2015-16. GVA from foodgrain production during the Kharif season of agriculture year 2016-17 was 8.9 per cent compared to a decline of 3.2 per cent during the same period in 2015-16. 

Around 51.0 per cent of GVA of this sector is based on livestock products, forestry and fisheries, which recorded combined growth of around 3.6 per cent in Q2 of 2016-17.

Quarterly GVA at basic prices for Q2 of 2016-17 from 'mining and quarrying' sector declined by (-) 1.5 per cent compared to a growth of 5.0 per cent in Q2 of 2015-16. As per available information, private corporate sector growth in the mining sector as estimated for major listed companies at current prices stood at (-) 1.1 per cent in Q2 of 2016-17.

The key indicators of mining sector, namely, production of coal, crude oil, natural gas and mining registered growth rates of -3.5 per cent, -3.3 per cent, -2.8 per cent and -2.7 per cent, respectively, during Q2 of 2016-17 compared to growth rates of 0.9 per cent, 1.7 per cent, 0.03 per cent and 3.1 per cent, respectively, in Q2 of 2015-16.

Quarterly GVA at basic prices for Q2 of 2016-17 from 'manufacturing' sector grew 7.1 per cent compared to a growth of 9.2 per cent in Q2 of 2015-16.

Quarterly GVA at basic prices for Q2 of 2016-17 from  'electricity, gas, water supply and other utility services' sector grew 3.5 per cent compared to a growth of 7.5 per cent in Q2 of 2015-16. 

Quarterly GVA at basic prices for Q2 of 2016-17 from 'construction' sector grew 3.5 per cent s compared to a growth of 0.8 per cent in Q2 of 2015-16. Key indicators of construction sector, namely, production of cement and consumption of finished steel recorded growth rates of 3.3 per cent and 4.8 per cent, respectively, during Q2 of 2016-17.

Quarterly GVA at basic prices for Q2 of 2016-17 from trade, hotels and transport and communication and services related to broadcasting grew by 7.1 per cent compared to growth of 6.7 per cent in Q2 of 2015-16.

As per the monthly data on state accounts available from CAG website, sales tax collection grew by 13.1 per cent during Q2 of 2016-17. 

Among the other services sectors, the key indicators of railways, namely, net tonne kilometres and passenger kilometres have shown growth rate of (-) 8.1 per cent and 0.4 per cent, respectively, during Q2 of 2016-17.  In case of other transport sectors, passengers handled by the civil aviation, cargo handled by the civil aviation and cargo handled at major ports recorded growth rates of 21.1 per cent, 8.1 per cent and 4.1 per cent, respectively, during Q2 of 2016-17.
 
Quarterly GVA at basic prices for Q2 of 2016-17 from sectors like financial, insurance, real estate and professional services grew 8.2 per cent compared to growth of 11.9 per cent in Q2 of 2015-16. Major component of this industry, ie, the real estate and professional services, has a share of 76 per cent. The quarterly growth of corporate sector for real estate sector and computer related activities at current prices are estimated at (-) 2.0 per cent and 7.8 per cent, respectively, during Q2 of 2016-17.

The other indicators of this sector, viz, aggregate bank deposits and bank credits have shown growth rates of 11.3 per cent, and 10.4 per cent, respectively, as of September 2016 against growth rates of 10.6 per cent and 9.1 per cent, respectively, as of September 2015.

Quarterly GVA at basic prices for Q2 of 2016-17 from public administration and defence and other services grew by 12.5 per cent compared to a growth of 6.9 per cent in Q2 of 2015-16. The key indicator of this sector namely, government expenditure, net of interest payments and subsidies, grew by 20.8 per cent during Q2 of 2016-17 compared to 1.1 per cent in Q2 of 2015-16.