India's GDP Up 7.4% in Q2 of FY 2015-16 & Manufacturing Sees Robust Growth of 9.3%

India's economy picked up pace in the second quarter of the current fiscal, comfortably outpacing China in the same quarter, but the stronger growth has dampened hopes of a rate cut when the Reserve Bank of India reviews its monetary policy on tomorrow. 

India's GDP rose 7.4 % in the second quarter of 2015-16, in line with expectations but faster than the 7% growth recorded in the preceding three-months. China's GDP rose 6.9% in the same quarter. 

The high growth was driven by a robust 9.3% rise in gross value added (GVA) in the manufacturing sector. 

Despite a poor monsoon, agricultural sector did better than expected with a 2.2% rise in GVA versus 2.1% YoY. 

The GDP growth had declined to 7% in April-June quarter from 7.5% in the previous quarter raising concerns that the recovery was not shaping well. 

RBI is expected to maintain interest rates after consumer inflation rose to 5% in October and the strong manufacturing growth numbers. 

The stronger growth will provide a boost to the Narendra Modi government in the ongoing parliament session wherein it is looking to pass key legislation including constitutional amendment bill to launch the goods and services tax ( GST). 

GDP at constant (2011-12) prices in Q2 of 2015-16 is estimated at Rs 27.57 lakh crore, as against Rs 25.66 lakh crore in Q2 of 2014-15 showing a growth rate of 7.4%, according to data released by the Central Statistics Office, Ministry of Statistics and Programme Implementation. 

Quarterly GVA for quarter was estimated at Rs 25.80 lakh crore, as against Rs 24.02 lakh crore in Q2 of 2014-15, showing a growth rate of 7.4 % over the corresponding quarter of previous year. 

As per the official data, the economic activities which registered growth of over 7.0 % in the second quarter were trade, hotels and transport and communication and services related to broadcasting, financial, insurance, real estate and professional services and manufacturing. 

The growth in the 'agriculture, forestry and fishing', 'mining and quarrying', 'electricity, gas, water supply & other utility services, 'construction' and 'public administration, defence and other services' was 2.2 %, 3.2 %, 6.7 %, 2.6 % and 4.7 %, respectively, during this period. 

Agencies