India GDP growth slows to 7.1 per cent; still the fastest globally

In what came as a surprise for several economists ,the GDP growth numbers were reported below the estimates at 7.1 per cent for the June quarter. The march quarter GDP growth numbers were reported at 7.9 per cent. Various economist polls suggested the GDP growth expectation was at 7.6 per cent for the first quarter.

This lower than estimated GDP growth number is indicative of a slowdown in the growth momentum for the economy in the first quarter of FY17. What triggered the decrease in  the numbers is the slowdown in agriculture, mining and construction activity.

One of the interesting aspect of the GDP numbers is the pick up in manufacturing activity to 9.1 per cent from 7.3 per cent a year earlier.

The slowdown was expected owing to slowing in foreign demand and softening domestic demand. Exports fell for consecutive 18 months. 

The slowing GDP is a concern as the country needs to grow consistently above 8 per cent to create enough jobs for millions who will be joining the workforce every year.

GDP growth below 8 per cent is a point of major concern for the current government. Inspite of all the challenges faced by the nation, India growing at 7.1 per cent still remains the fastest growing economy in the world.