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3% growth in economy far below what Modi govt promised: Chidambaram

3% growth in economy far below what Modi govt promised: Chidambaram

India Inc expressed happiness over an increase in GDP to 6.3% from 5.7% in the last quarter and said as the GST settles down, the growth rate would be even higher. The growth in construction sector was projected at 2.6% compared to 4.3% in the same quarter a year ago. But we can not say now whether this will mark an upward trend in the growth rate.

Speaking at the HT Leadership Summit here, he said India has done well by growing at 7-8 per cent during the last three years.

This prompted Finance Minister Arun Jaitley to say that the impact of demonetisation and the GST were behind us.

He further said Q2 economic growth is also far below the potential of a well-managed Indian economy.

Chief Statistician T C A Anant said it was indicative of growth returning to normal levels.

Growth had slowed to a three-year low of 5.7% during the previous quarter as demand was doused by confusion about the planned rol out of a national goods and services tax.

"Manufacturing reported growth of 7 per cent, electricity, gas and water supply at 7.6 per cent, and trade, hotels, transport and communication grew at 9.9 per cent", he said.




Gross value added (GVA), a key input of GDP that is tracked by the RBI, rose 6.1 per cent in July-September compared to 5.6 per cent in the June quarter this year and 6.8 per cent in the September quarter of the last fiscal. He said the important thing to note was that growth has come due to the strong performance of the manufacturing sector.

The agriculture, forestry and fishing sector is estimated to have grown by 1.7 per cent.

Moody's Investors Services recently upgraded India's sovereign rating for the first time in almost 14 years, saying the country was poised for fast growth because of wide-ranging economic and institutional reforms by Prime Minister Narendra Modi's government.

Mining also posted a sharp uptick in growth to 5.5 per cent from a decline of 0.7 per cent in the previous quarter.

Earlier this month, rating agency Moody's - which upgraded India's credit rating to Baa2 from Baa3 and changed its India outlook to positive from neutral - said it expected the economy to grow at 6.7 per cent this fiscal and rise to 7.5 per cent in 2018-19.

Congress leader and former Finance Minister P. Chidambaram tweeted that he was "happy that the July-Sep quarter has registered a growth rate of 6.3 per cent" but said this was below expectations.


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