Press Release: Second Quarter GDP Growth

The sterling performance of the economy in the second quarter, with the GDP growth clocking 7.9 per cent as compared to 6.1 per cent in the first quarter has surpassed all expectations. The current trend shows that the Green Shoots of economic recovery are firmly taking root with strong domestic demand emerging as a key driver of economic growth. “The current performance has rekindled hopes that the Indian economy would have an upward growth at 6.5 per cent in the current fiscal as predicted by the PM’s Economic Advisory Council”, said Mr. Satish Bagrodia, President, PHD Chamber. 

What is particularly noteworthy is the impressive growth in the mining, manufacturing and the services sector. “However, agriculture continues to be a cause for concern with a mere 0.9 per cent growth due to the impact of weak monsoon. However, the upside is that the growth in farm production, while still below average, has been much higher than recent forecasts which predicted a negative growth in agriculture. Such a scenario points towards improved agri infrastructure and irrigation facilities which have minimized the impact of monsoon”, added Mr. Bagrodia. 

Having said so, there is no cause for complacency. The fundamental imbalances in the world economy have not yet disappeared as has been demonstrated by the debt crisis in Dubai. Besides, industrial growth is also showing a fluctuating performance while third quarter agriculture growth may still be negative. All this could hamper our nascent recovery.

"Hence it is important that steps be taken so that growth trigger unleashed in the economy during the second quarter of the current fiscal is maintained in order that 6.5-7% GDP growth is achieved for the entire year.  For this it is important to develop a strong political will to implement the reforms in real earnest.  These are effective labour reforms, disinvestment of non-strategic PSUs, infrastructure and power sector reforms, and reforming central and state finances. Stepping up investment in agriculture is a priority and credit availability to industry, particularly the SMEs, should be ensured as these units are not getting the benefit of recent RBI measures", further added Mr. Bagrodia.

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