FinMin Calls GDP Growth ‘Reasonable’, Top Govt Official Disagrees

Economic Affairs Secretary Subhash Chandra Garg said the September quarter GDP growth “seems disappointing.”

Economic Affairs Secretary Subhash Chandra Garg.

(Photo courtesy: Twitter)

The Finance Ministry on Friday, November 30, said the 7.1 percent growth in July-September quarter is "reasonable" as the economy faced the challenge of higher oil prices and weak rupee during the three month period.

Economic Affairs Secretary Subhash Chandra Garg, however, said that even though the September quarter GDP growth "seems disappointing", a 7.6 percent growth in the April-September period is "quite robust and healthy" and shows that India still has the highest growth rate in the world.

"GDP growth for the second quarter 2018-19 at 7.1 percent seems disappointing. Manufacturing growth at 7.4 percent and agriculture growth at 3.8 percent is steady... Mining at 2.4 percent reflects monsoon months deceleration," Garg tweeted.

The ministry said in a statement:

“The second quarter has seen a reasonable overall GDP growth of 7.1 percent. The growth is on higher base compared to the growth of the first quarter.”

The government said the July-September quarter faced the challenge of higher oil prices, resulting in much higher import bill and the weakening of the rupee. "The Indian Economy is on track to maintain a high growth rate in the current global environment," the ministry said.

The government data released on Friday shows India’s economy grew at 7.1 per cent in July-September, lowest in three quarters. The growth was 8.2 per cent in April-June quarter of this fiscal. In January -March quarter the growth was 7.7 per per cent, while it was at 7 per cent in October-December last year.

"The Gross Fixed Capital Formation as a ratio of GDP has increased by almost 1.3 percentage points over Q2 of last year. The exports for Q2 have grown by 13.4 per cent. The government consumption for the quarter has also significantly increased by 12.7 per cent," the ministry added.