New Delhi (dpa) – India’s economy grew at a lower-than-expected 7 per cent between April to June, compared to 7.5 per cent in the previous quarter, government data released Monday showed.
Growth data disappointed as several polls by television channels had forecasted a growth of 7.4 to 7.5 per cent. India’s financial year runs from April to March.
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According to the Ministry of Statistics and Programme Implementation, the 7 per cent growth was led mainly by a 12.8 per cent expansion in commercial services, 8.9 per cent in financial services and 7.2 per cent in manufacturing output.
India had outpaced China as the world’s fastest growing major economy in the last quarter. But the new figures meant that the giant Asian neighbours are joint holders of that title as China had also logged a 7 per cent growth in the recent quarter.
The deceleration in Indian growth is bound to put pressure on the Narendra Modi government to step up economic reforms to ease tax rules and land acquisition to propel growth.
At the same time, doubts over India’s new way of calculating GDP persist, with economists saying the figures do not accurately reflect growth.
The government had announced in January that it was changing its method of calculating GDP, revising the base year from 2004-05 to 2011-12. It also switched from using production costs to market prices.
Indian economists are hoping that the Reserve Bank of India will announce a rate cut in its next monetary policy announcement due next month to spur growth.
Modi’s Bharatiya Janata Party came to power in May 2014 on a promise to fight inflation and return India to a path of 8-per-cent annual growth.
