The government today kept its economic growth forecast for current fiscal unchanged at 7.5 per cent buoyed by turnaround in manufacturing and pick up in investment.
Data released by the CSO showed that gross domestic product (GDP) growth in the January-March quarter of 2017-18 was at a 7-quarter high of 7.7 per cent, helping India retain the tag of world's fastest growing major economy.
However on the yearly basis, the Indian economy grew at 4-year low of 6.7 per cent in 2017-18, down from 7.1 per cent in the previous fiscal. The previous low was recorded in 2013-14 at 6.4 per cent.
Finance Minister Piyush Goyal said the 7.7 per cent GDP growth in the fourth quarter of 2017-18 showed that the economy was on right track for higher growth in the future.
The growth surpassed China's 6.8 per cent expansion in the January-March period.
"GDP growth has been increasing continuously every quarter with growth of 7.7% in Q4 of 2017-18. Shows that the economy is on the right track & set for even higher growth in the future. This is the #SahiVikas under leadership of PM," Goyal tweeted.
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Economic Affairs Secretary Subhash Chandra Garg said the GDP data indicated a turnaround in manufacturing and construction activity, as also pick up in private investments.
"I don't think we are revising our forecast for the current year 2018-19 which was indicated at 7.5 per cent. We retain it at this moment at this level. There has been some downward revision by Moody's and others taking oil prices into consideration, but there is no one to one relation between oil price and GDP growth," Garg told reporters here.
US-based credit rating agency Moody's had yesterday cut India's 2018 growth forecast to 7.3 per cent from the previous estimate of 7.5 per cent, saying higher oil prices and tighter financial conditions will weigh on the pace of acceleration.
Garg said that historically there have been various periods when oil prices have gone up, but there has been economic growth also.
"We feel that we should retain (growth forecast). And this momentum you see in Q4 number, should see us through to this kind of level of growth next year," he said.
Finance Secretary Hasmukh Adhia said the constant increasing trend of quarterly GDP numbers indicates that the structural measures of reforms undertaken by the government are now bringing rich dividends in the form of higher GDP growth rate.
In 2017-18, the Indian economy grew at 5.6 per cent in first quarter, 6.3 in the second, 7 per cent in the third and 7.7 in the fourth.
"What is most noticeable is the increase in the Growth Rate of GVA of Manufacturing Sector in the last two Quarters of 2017-18 at 8.5 per cent and 9.1 per cent at constant price. We would like to believe that GST has given a big boost to the Industrial Sector," tweeted Adhia, who is also the Revenue Secretary.
As per data released today, manufacturing sector GVA grew at 9.1 per cent in fourth quarter up from 6.1 per cent year ago. Similarly construction sector grew at 11.5 per cent in fourth quarter compared to a contraction of 3.9 per cent year ago.
Garg said the agriculture sector has witnessed growth in the fourth quarter, while manufacturing and construction data indicate a "turnaround in the economy which going forward will give a good momentum to growth".
"Hope to see our economy maintain such higher growth at 7.2 to 8 per cent every quarter for India to see growth of 7.5 per cent in 2018-19," Garg tweeted.
He said he did not see any co-relation between oil prices and GDP growth and the fiscal deficit would remain as per the targets.