INDIA’S economy grew at 6.3 per cent in the second quarter of the financial year, official data showed last Thursday (30), rebounding from a sharp slowdown in the wake of high-profile reforms.
Government figures showed Asia’s third-largest economy expanded for the first time in five quarters, shaking off the lingering impact of a sudden cash ban and launch of a nationwide tax that had dragged growth to three-year lows.
The official figures were slightly below expectations. A Bloomberg survey of economists predicted GDP growth at 6.4 per cent from a three-year low of 5.7 per cent in the previous June-ended quarter.
But the upturn will come as a relief for prime minister Narendra Modi, who has been dogged by criticism over two major reforms that stalled India’s much-needed economic expansion.
In the last 12 months Modi’s government withdrew most of India’s high-value banknotes from circulation in a snap move known as “demonetisation” and rolled out a national goods and services tax. Both measures sent shockwaves through India’s $2 trillion economy, with growth dipping to 6.1 per cent in the three months ending March before bottoming out at 5.7 per cent in June.
The slump cost India its title as world’s fastest-growing major economy but the government defended the pain as necessary.