Finance Minister Arun Jaitley has said, the GDP rate at 6.3 percent marks the reversal of declining trend in the last five quarters. The country's fiscal deficit crossed 96 per cent of Budget estimates at October-end. "The numbers indicated that the impact of demonetisaton and GST (Goods and Services Tax) are behind us", he added.
However, it can not be said now whether this will mark an upward trend in the growth rate.
He further said that the two structural reforms - GST and demonetisation - will benefit the economy in the medium and long-term.
Opposition Congress on Thursday observed that GDP growth was a "temporary pause" from the downward trend though an "encouraging sign".
It was destocking in the first quarter of 2017-18 due to pre-GST jitters that had pulled down gross domestic product (GDP) growth to a more than three-year low. "Gross fixed capital formation has also picked up from last year's lacklustre pace".
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The Finance Minister further said, "The deceleration in overall growth witnessed since the first quarter of the last fiscal has been reversed and the economy now seems to have weathered the transitional challenges experienced earlier in the year and appears poised for a durable recovery going forward".
Reversing the five quarters of slowing GDP growth, Indian economy expanded by 6.3 per cent in July-September on the back of a pick-up in manufacturing. "It's possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later...inventory accumulation effect may persist in the third quarter as well", he explained.
It expects the economy to grow 6.7 percent in the fiscal year ending March 31, and 7.5 percent the following year. The growth in agriculture, forestry and fishing was 1.7 per cent, mining and quarrying 5.5 per cent, construction 2.6 per cent, and financial, insurance, real estate and professional services 5.7 per cent.
" The economic activities which registered growth of over 6.0 percent in Q2 of 2017-18 over Q2 of 2016-17 are "manufacturing", "electricity, gas, water supply & other utility services and "trade, hotels, transport & communication and services related to broadcasting".
TMC chief and West Bengal Chief Minister Mamata Banerjee was, however, more vocal in her criticism and claimed that a growth of 6.3 per cent was "no growth".