Modi Effect: Indias economic growth hits over 2.5 years high of 5.7% in Q1 India`s faltering economy grew at its fastest pace in over 10 quarters during the first quarter of this year, government data showed on Friday. Indian economy grew at 5.7 percent in April-June quarter of 2014-15 as compared to 4.7 percent year-on-year. Manufacturing expanded at an annual rate of 3.5 percent during the April-June quarter compared with a contraction of 1.2 percent a year ago. Mining sector grew 2.1 percent compared with a 3.9 percent annual fall a year earlier, the data showed. However, the annual farm output growth slowed to 3.8 percent in the quarter, from 4.0 percent a year ago. In July, the finance ministry forecasted a growth of 5.4 to 5.9 percent for the financial year ending March 31, 2015. In the past two years, the growth slowed to around half of the near double-digit levels seen a few years ago, hit by high interest rates to curb stubborn inflation, a weaker global economic backdrop and a fall in foreign investments as corruption scandals embroiled the Congress led UPA government. Economists often assert that India needs at least eight to nine percent of robust economic growth to create jobs for a ballooning youth population. To help spur growth, Modi has pledged to hasten introduction of a long-awaited goods and services tax (GST) to replace India`s patchwork of levies that make business transactions more complex and costly. Modi has also been seeking to jumpstart India`s investment pipeline by easing a cumbersome bureaucratic approval process. But many big ticket industrial projects remain stalled by slow pace of environmental clearances and other factors.
Posted on: Fri, 29 Aug 2014 12:54:40 +0000
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