Finance Minister Arun Jaitley today said the rise in GDP growth rate to 6.3 per cent in the July-September period of 2017-18 signals a reversal of downtrend seen over the preceding five quarters.
The economy now seems to have weathered the transitional challenges experienced earlier in the year and appears poised for a durable recovery going forward, he told reporters.
"This (growth) indicates that perhaps the impact of two very significant structural reforms, demonetisation and GST, is now behind us. And hopefully in the coming quarters we can look for upwards trajectory," he said while commenting on the data released by the Central Statistics Office (CSO).
Reversing a five-quarter slide in GDP growth, the Indian economy bounced back from a three-year low to expand by 6.3 per cent in July-September as manufacturing revved up and businesses adjusted to the new GST tax regime.
The GDP growth in the second quarter of 2017-18 compares to 5.7 per cent in April-June, the lowest growth rate since the Narendra Modi government took office, and 7.5 per cent in the September quarter of the previous fiscal.
Jaitley further said since May 2014, out of the 13 quarters, the country has clocked upwards of 7 per cent growth eight times.
"We have fallen below 6 per cent only once and that was the last quarter. Therefore, if you at all compare this to any previous figures immediately preceding that, this looks entirely different.
"The fact that it marks reversal, it's been enabled essentially by manufacturing and that investment has moved up, which was challenging so far," he said.
Jaitley also said the rate of growth of gross fixed capital formation in July-September at 4.7 per cent is encouraging, adding that "investment is moving up".
To a query on dip in revenue collection under GST, he said it is "still early days" because transitional credits are being claimed and "therefore the pattern how it will work out has still not fully established".
He, however, hoped the collection in the medium and long term will pick up.
Earlier in the day, Chief Statistician T C A Anant had pointed out that while calculating GDP, the indirect tax number that has been taken is based on certain calculations.
"So there is an underestimation. That is what he (Anant) is saying. To that extent GDP number may go up when it is finally revised," Finance Secretary Hasmukh Adhia said.
Chief Economic Advisor Arvind Subramanian, who was also present at the press briefing, said growth would be "pretty much" in line with the projections made in the Economic Survey tabled in Parliament in January this year.
The Survey had projected India's GDP growth in the current fiscal to be in the range of 6.7-7.5 per cent.
To a question on rising prices of crude oil in the international market, the CEA said oil prices are not expected to rule above USD 60 a barrel over a sustained period.
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