NEW DELHI: The economic upturn appears to have truly begun. The latest government data on Monday showed the economy growing by 6.1% year-on-year
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during the first quarter (April-June) of the fiscal the fastest for any quarter since the global Error! Hyperlink reference not valid. began almost a year ago making officials expect 6.5% growth this year.
This growth rate means India remains the second-fastest growing major economy after China, which notched almost an 8% growth rate. More importantly, it's an improvement over the 5.8% notched up by India in the previous quarter and 5.3% recorded in the quarter before that.
If there's a shadow of cloud accompanying this brightening sky it's the uncertainty about whether the economy can maintain this momentum in the next quarter (and perhaps the one after that) when the agriculture sector got hit by a poor monsoon.
The growth figures are in line with projections. They tend to bear out that government stimulus measures for the economy have helped to create demand. The share of consumer spending in the economy shrunk to 55.6% in April-June from 58% a year ago, while the government's share rose to 9.9% from 9.6% on the back of stimulus spending.
The markets found nothing much to cheer in the latest data, with the BSE Sensex shedding 220 points at close (although after a sharp rise last week, which might indicate that there was profit-booking on Monday).
In contrast, top government officials were gung-ho. "I am glad that the worst may be over and we expect to see improved performance in subsequent quarters. It (the growth figure) is very good, it is consistent with what we were hoping for,'' Planning Commission deputy chairman Montek Singh Ahluwalia told reporters in Delhi.
In Mumbai, Error! Hyperlink reference not valid. secretary Ashok Chawla said with encouraging first quarter growth, the government expects the economy to grow at 6.5% this fiscal....