New Delhi, Dec 1: Helped by pick up in manufacturing, India’s economy grew by 7.4 per cent in July-September, outpacing China to become the fastest growing major economy, supporting the case for RBI to keep interest rates steady.
While the gross domestic product or GDP of Asia’s third-largest economy expanded 7.4 per cent in Q2 from 7 per cent in the previous quarter, growth rate of eight core infrastructure industries slowed to 3.2 per cent in October.
GDP growth rate, however, was lower than 8.4 per cent recorded in the July-September quarter of the previous fiscal.
Amid global headwinds, Chinese economy has slowed down while other emerging economies of Brazil to Russia are contracting. China expanded by 6.9 per cent growth in July-September while Russia contracted by 4.1 per cent and Brazil is forecast to shrink by 4.2 per cent.
Manufacturing output rose 9.3 per cent in Q2 and financial services 9.7 per cent. Electricity and gas production rose 6.7 per cent while the construction sector expanded 2.6 per cent.
Buoyed by Q2 numbers, Finance Minister Arun Jaitley said the GDP in current fiscal will be better than the 7.3 per cent growth rate recorded in last financial year and improve further in the subsequent years.
The “significant” 9.3 per cent growth in manufacturing sector was despite adverse global situation. “I think the Q2 figures give us a sense of satisfaction… We expect growth this year to be better than last year and even better the next year,” he said.
Growth is mostly driven by public spending than private consumption. Investments grew 6.8 per cent in Q2 compared with 4.9 per cent in April-June.
