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Jaitley indicates merger of 12 per cent, 18 per cent GST slabs

Jaitley indicates merger of 12 per cent, 18 per cent GST slabs

India's gross domestic product expansion accelerated last quarter as businesses and consumers started to get used to the South Asian nation's new tax regime.

The former finance minister said this after India reported a 6.3 per cent GDP growth rate in the July-September quarter of the current fiscal.

Replying to a question on how the implementation of GST has impacted the GDP, Anant said "it introduced a measure of statistical challenge for us" while calculating the growth rate.

The GDP growth had hit a three-year low in the first quarter of 2017-18.

The country's economic growth recovered to more than 6 per cent in the July-September quarter, backed by strong manufacturing, allaying doubts related to disruptions caused by the goods and services tax (GST).

The second quarter estimates are based on agricultural production during Kharif season of 2017-18 obtained from the Ministry of Agriculture, Department of Agriculture & Cooperation (DAC), abridged financial results of listed companies from BSE/NSE, Index of Industrial Production (IIP), monthly accounts of Union Government Expenditure maintained by Controller General of Accounts (CGA) and of State Government expenditure maintained by Comptroller and Auditor General of India (CAG).

Jailtey said achieving a 10% economic growth rate is "very challenging" and double-digit GDP growth will depend on how the world economy moves. "But we can not say now whether this will mark an upward trend in the growth rate", Chidambaram added. He said the important thing to note was that growth has come due to the strong performance of the manufacturing sector. The agriculture sector, on which a large section of the population, specially in rural areas, are dependent for their livelihood, saw a slower growth of 1.7 per cent in the second quarter, against 2.3 per cent in the first one. "Quarterly GDP growth accelerates to 6.3 per cent versus 5.7 per cent in the previous quarter".

The agriculture, forestry and fishing sector is estimated to have grown by 1.7 per cent.

"Traditionally, July-September is a quarter where a lot of production takes place to cater to festive demand".

While manufacturing grew rapidly at 7% in the September quarter from merely 1.7% in the first quarter (April-June), the growth in electricity and other utilities was recorded at 7.6% and it was nearly 10% in trade, hotel, transportation and communication.

Mining also posted a sharp uptick in growth to 5.5 per cent from a decline of 0.7 per cent in the previous quarter.