India’s gross domestic product (GDP) grew 7.9 per cent in the fourth quarter of 2015-16, increasing overall growth for the entire year to 7.6 per cent and help maintain its position as the fastest-growing major economy, according to the Central Statistics Office (CSO).
India’s gross value added (GVA) for the year grew by 7.2 per cent in what economists termed a consumption-led recovery.
‘Doing nothing’ “We are still in a situation where corporate investment is doing nothing,” Pronab Sen, Former Chairman, the National Statistical Commission, told The Hindu .
“Any movement in investment is due to the public sector. This is being reflected in higher private consumption which is a good thing up to a point. But it does pose a danger of the re-emergence of inflation unless the monsoon is spot on this time.”
Agriculture sector The agriculture sector grew 1.2 per cent compared to the advance estimate of 1.1 per cent. The sector contracted 0.2 per cent in the previous year.
Manufacturing grew 9.3 per cent, slower than the 9.5 per cent forecast in the advance estimates. But this is much higher than the 5.5 per cent seen in 2014-15. The consolidated services sector grew 8.8 per cent in 2015-16 compared to 9.05 per cent mentioned in the advance estimates.
Private final consumption expenditure, a proxy for private demand, grew at 7.4 per cent in 2015-16 compared to 6.4 per cent in the previous year. Growth in gross fixed capital formation, a measure of private sector investment, slowed down to 3.9 per cent from 4.9 per cent in 2014-15.
Construction sector grew 3.9 per cent in 2015-16 compared to 4.4 per cent in the year-earlier period. However, the sector grew at 4.5 per cent in the fourth quarter of FY16 compared to 2.6 per cent in the year earlier period.
“These numbers are very much in line with the full year advance estimates,” said D.K. Srivastava, Chief Policy Advisor, EY India.
“The only points of concern would be the low growth in construction, the lower-than-expected growth in agriculture and the state of private investments and exports,” he said.
Real GDP “Real GDP or GDP at constant (2011-12) prices for the year 2015-16 is now estimated at Rs.113.50 lakh crore, showing a growth rate of 7.6 per cent over the First Revised Estimates of GDP for the year 2014-15 of Rs.105.52 lakh crore,” according to a statement from the Central Statistics Office.
The statistics office also revised downwards the GDP growth rate for the previous quarters of 2015-16. The first quarter grew at 7.5 per cent, slightly lower than the 7.6 per cent as per the advance estimates.
The second quarter witnessed a growth rate of 7.6 per cent compared to the 7.7 per cent in the advance estimates. The third quarter grew at 7.2 per cent compared to the previous estimate of 7.3 per cent.
“Growth rate in the 4th quarter of 2015-16 at 7.9 per cent, almost hits the magical 8 per cent mark. Good days ahead,” tweeted Arvind Panagariya,Vice-Chairman, Niti Aayog.