India Q1 economy grows by 7%

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NEW DELHI: India’s economy grew by a slower than expected 7.0 percent in the first quarter of this financial year, official figures showed on Monday.

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Growth in the three months through June slowed to 7.0 percent year-on-year from 7.5 percent in the previous quarter, the statistics ministry data showed.

The figures were lower than the median forecast of 7.4 percent in a survey of economists by Bloomberg News.

India’s growth overtook that of regional economic powerhouse China in the first three months of 2015, prompting Finance Minister Arun Jaitley to announce the economy was in “recovery mode.”

But analysts said the latest figures indicated the government’s attempts to revive the economy were faltering.

“The GDP number shows that there is no take-off in any of the key sectors of the economy,” Madan Sabnavis, chief economist at Care Ratings, told Agence France-Presse.

“The high government spending which was expected to provide the boost is not being reflected in the numbers.”

Prime Minister Narendra Modi swept to power in May 2014 on a pledge to reform and revive Asia’s third largest economy to help provide jobs for India’s millions of young people.

But many of Modi’s economic reforms have stalled in parliament where his Bharatiya Janata Party lacks a majority.

Monday’s figures were the latest gross domestic product (GDP) data to be released since the government introduced a revised formula for calculating GDP that some analysts have criticized.

India’s government changed the way it calculates GDP in January, with officials saying the new method was closer to international standards.

AFP

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