Industry propels growth; trade, hotels, etc, prove a dampener

For the quarter ended June this year, India’s economy grew at a nine-quarter high of 5.7 per cent, compared with 4.6 per cent in the previous quarter, driven largely by industry, even as the biggest segment of the services sector — trade, hotels, transport and communications — remained subdued, official data showed on Friday.

For the June quarter of 2013-14, gross domestic product (GDP) had increased 4.7 per cent.

During the June 2014-15 quarter, the agriculture segment expanded 3.8 per cent, against 6.3 per cent in the previous quarter and four per cent in the corresponding period of 2013-14.

What primarily drove the economy in the June quarter was industry, which expanded 4.2 per cent, against contractions of 0.19 per cent in the previous quarter and 0.4 per cent in the corresponding period last year. The manufacturing sector expanded 3.5 per cent; this followed four consecutive quarters of contraction, suggesting a revival in business confidence. In the previous quarter, manufacturing contracted 1.4 per cent, while the decline in the June quarter of 2013-14 was 1.2 per cent.

The numbers will boost hopes the economy’s growth this financial year will exceed five per cent, after sub-five per cent growth in the previous two financial years.

For more visit: Business Standard

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