Guwahati: Contraction in output of manufacturing and mining pushed India’s growth lower in the second quarter as it has fallen to more than half with a growth rate reduced to 6.3 percent in the July-September period.

The margin fell from 13.5 percent between March and June.

Chief Economic Advisor V Anantha Nageswaran said the data confirms that the economy’s recovery from the pandemic continues and is on track to clock between 6.8% to 7% real GDP growth this year.

Among GVA components, the sharpest growth in Q2 was reported by the contact-intensive trade, hotels, transport, communication and services related to broadcasting segment, which surged 14.7%, followed by financial, real estate and professional services, which expanded 7.2%, and construction which grew 6.6%.

Despite rising prices and a rapid rise in borrowing costs due to increasing rates by the Reserve Bank of India to curb inflation, India is still likely to be the fastest-growing economy worldwide.

In India, private consumption grew by 9.7 percent compared to a year earlier while capital formation jumped by 10 percent.

Farm output climbed 4.6 percent while activity in the jobs-generating construction sector increased by 6.6 percent.
The manufacturing sector was the big disappointment that fell 4.3 percent year-on-year. Along with, mining also slid down.

According to the experts , Risks of inflation means that central bank will likely hike the benchmark interest rate by 50 basis points at its meeting this month and another 35 basis points in February, to hit a peak of around of 6.75 percent.

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