India’s economic recovery is losing some steam and there is a likelihood of slowdown in the growth momentum, says Japanese financial services firm Nomura [Image: Archives]India’s gross domestic product (GDP) grew an annual 7.3 per cent in the quarter through December, official figures showed on Monday.
The government also forecast that GDP growth for the fiscal year ending in March 2016 would accelerate to 7.6 per cent from a revised 7.2 per cent a year earlier.
The Central Statistics Office (CSO) revised upwards the GDP growth estimates for April-June and July-September quarters to 7.6 per cent and 7.7 per cent from earlier calculation of 7 per cent and 7.4 per cent, respectively.
At 7.6 per cent, India would be growing at the fastest pace in the last five years. The previous high was recorded at 8.9 per cent in 2010-11.
The growth of mining and quarrying sector, electricity and power supply and other services is likely to witness deceleration during the current financial year.
Commenting on the GDP data, Economic Affairs Secretary Shaktikanta Das said, “The direction of the numbers is very positive. The policy and reform measure the government has undertaken in last one and a half years are beginning to show results.”
Many analysts however are sceptical of the data.
India’s Central Bank Governor Raghuram Rajan has raised fresh doubts over the new method of calculating GDP that was introduced early last year.
“There are problems with the way we count GDP which is why we need to be careful sometimes just talking about growth,” Rajan said at an event last week.
“We have to be a little careful about how we count GDP because sometimes we get growth because of people moving into different areas. It is important that when they move into newer areas, they are doing something which is adding value. We do lose some, we gain some and what is the net, let us be careful about how we count that,” he said.
This is not the first time India’s Central Bank has pointed to lingering doubts.
The Reserve Bank of India (RBI) pointed out several gaps in the new figures in April last year, which it said clouded an accurate assessment of the economy and could lead to poor policy.
India is now outpacing China with above 7 per cent annual growth.
TBP and Agencies
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