Kankana Roy Choudhurymoneycontrol.com
Indian economy has grown at 5.3 percent in the second quarter of the fiscal year as against 5.7 percent in the first quarter and 5.2 percent in the second quarter last year, the Central Statistics Office (CSO) data revealed on Friday. The GDP grew at 5.5 percent against 4.9 percent in the first half of the fiscal Y-o-Y.
Economic activities which registered significant growth in Q2FY15 over Q2FY14 are electricity, gas and water supply at 8.7 percent, construction at 4.6 percent, community, social and personal services at 9.6 percent and financing, insurance, real estate and business services at 9.5 percent.
The growth rates in agriculture, forestry and fishing is estimated at 3.2 percent, mining and quarrying at 1.9 percent, manufacturing at 0.1 percent and trade, hotels, transport and communication at 3.8 percent during the period.
A CNBC-TV18 poll had anticipated the pace of growth to slide to 5 percent on the back of slowdown in industries, seen growing by 1.3 percent as against 4 percent on a quarter-on-quarter basis.
Reacting to the news, Samiran Chakraborty, Head Research, Standard Chartered Bank, says the print is good. Agriculture contributed majorly, which grew at 3.2 percent against his expectation of 1.7 percent. “If industry trend picks up, then by the year-end GDP can be around 5.5 percent level,” he says, adding that even the growth in trade and hotels sector was in line with his expectation.
Sajjid Chinoy, Asia Economics, JP Morgan, says the numbers are a lot better than his expectation. “But one has to separate the one-offs from organised acceleration. Agricultural growth at current levels won’t sustain long. It will fall in the next quarter,” he said. Chinoy expects community services to be pretty strong, contributing to the 5.3 percent figure.
Manoj Rane, Managing Director and Head- Fixed Income and Treasury, BNP Paribas India, says growth outperformed expectation, especially services and agriculture. But now manufacturing sector needs to pick up. He is not expecting the market to react much. The market, according to him, is not expecting a rate cut by the RBI, but is expecting a benign statement.
Dilip Bhat of Prabhudas Lilladher, believes there is still hope for a rate cut. But if it does not materialize, even then the market will react positively.
According to latest estimates available on Index of Industrial Production (IIP), index of mining, manufacturing and electricity, registered growth rates of 1.3 percent, 0.1 percent and 9.4 percent, respectively in Q2FY15. The key indicators of construction sector, namely, production of cement and consumption of finished steel registered growth rates of 9.8 percent and 0.3 percent, respectively.
The next release of quarterly GDP estimate for October-December, 2014 (Q3FY15) will be on February 9, 2015.
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