GDP growth hits 3 year low of 5.7% during April-June

RSTV Bureau
File photo of a tyre factory in Mumbai.

File photo of a tyre factory in Mumbai.

India’s economic growth slipped to a three-year low of 5.7 per cent in April-June as disruptions caused by demonetisation spilled over to the third straight quarter amid slowdown in manufacturing activities.

GDP had expanded by 6.1 per cent in the preceding quarter.

This compares with revised growth of 7.9 per cent in the first quarter of 2016-17.

In yet another sign of slow growth of Indian economy, as per the latest official data released on Thursday, the growth of eight core sectors slowed to 2.4 per cent in July due to contraction in output of crude oil, refinery products, fertiliser and cement.

These eight infrastructure sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – had witnessed a 3.1 per cent growth in July last year.

The production of crude oil declined by 0.5 per cent, refinery products by 2.7 per cent, fertiliser by 0.3 per cent and cement by 2 per cent, as per official data.

Coal output growth decelerated to 0.7 per cent last month as against 4.1 per cent in July 2016.

According to data, natural gas output rose by 6.6 per cent in July.

Steel production and power generation rose to 9.2 per cent and 5.4 per cent, respectively in July this year from zero per cent and 2.1 per cent in the same month last year.

Cumulatively, the eight core sectors in April-July recorded a growth of 2.5 per cent as against 6 per cent in the same period a year ago.

Slow growth in key sectors would also have implications on the Index of Industrial Production (IIP) as these segments account for about 41 per cent to the total factory output.

In June, these eight sectors had recorded a growth rate of 0.8 per cent.