Fuelled by increasing consumer spending and higher manufacturing, the Indian economy has overtaken China yet again to become the world’s fastest growing country with GDP growth rate touching 7.2% for the October-December quarter of this fiscal year.
Data released by the Central Statistical Office reveals that economic growth in the last quarter was faster than five quarters before that. Following this revelation, the government has revised its 2017-18 GDP growth estimates upwards from 6.5% to 6.6% now.
The data reveals that eight core sectors registered strong growth at 6.7% in January compared to 3.4% in the same period last year. These sectors include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity. Apart from these, mining, construction, financial services and agriculture also saw an upward movement in growth.
Economists say better consumer spending has been crucial in increasing demands and, in turn, manufacturing and exports in this quarter. This has enabled faster growth, which is proven by enhanced corporate earnings and improved stock markets perceptions.
Rising GDP growth is also an indicator of the fact that the impact of the shock that the Indian economy had received following demonetization and goods and service tax is now receding, which indicates an even faster upward trajectory in the upcoming months. Keeping this in mind, the government has even made several big-money provisions in the budget to improve infrastructure for attracting foreign investments and projecting India as a viable business destination.