First estimate pegs GDP growth rate at 6.5% for FY2017-18

GDP forecast at 6.5 per cent Chief Statistician Anant acknowledges GST as one of the factor

GDP forecast at 6.5 per cent Chief Statistician Anant acknowledges GST as one of the factor

GDP had grown by 6 per cent in the first six months of FY18.

The country's gross domestic product (GDP) growth is estimated to grow at 6.5 per cent during 2017-18 - a four year low.

These will be the first official full-year growth estimates after GST's rollout.

Chief Statistician TCA Anant said, "The de-stocking disruption caused due to the GST implementation has impacted the full-year GDP estimates". "GDP growth of 6.5% for 2017-18 implies growth of 7% for the second half", economic affairs secretary Subhash Chandra Garg tweeted. It confirms a strong turnaround of the economy. "Investment growth of nearly twice of last year's indicate investment reviving". He added that manufacturing estimates included GST impact during the initial quarters.

"These numbers have a bearing on the fiscal deficit numbers for this year and next year as well", said D.K. Srivastava, chief policy advisor at EY India.

The Indian economy grew 6.3 percent in July-September, recovering from a three-year low growth slump of 5.7 percent in April-June.

But what is worrying is that finance minister Arun Jaitley had projected a GDP growth of 11.75 per cent at current prices in his budget last February (Rs 168.47 lakh crore). RBI had forecast a higher GVA growth of 6.7%. As per the new methodology followed by the CSO, GDP is calculated by adding product taxes to GVA at basic prices and removing subsidies. "Hence, the GDP growth will become more robust in 2018-19". The estimates assume significance in the wake of the fact that the higher second-half growth has come despite a waning of public sector expenditure, which had peaked in FY17 on account of the implementation of the recommendations of the Seventh Pay Commission. It expects the growth to pick up to 3.7% in 2018.

"Given the momentum seen in the core sector growth, PMI (purchasing mangers' index) indices and developed world economies, the optimism may not be belied". The CSO's estimate of national income for 2017-18 showed the GDP at constant (2011-12) prices for 2017-18 is likely to attain a level of Rs 129.85 lakh crore.

"As such, for a broad based recovery the rural economy needs to recover and we can expect the upcoming budget to focus on alleviating some of the stress in the rural economy and concentrating on measures to augment the flow of credit in the economy", said Chakravarty. "It is possible that this number will be revised up once more data is available for the third and fourth quarter of the year", said CII Director General Chandrajit Banerjee.

Growth in the trade, hotels, transport and communication and services related to broadcasting is estimated at 8.7%, quickening from 7.8% in the previous year.

"The lower GDP growth in FY18 clearly reflects the challenges the Indian economy is facing in terms of maintaining growth momentum".

Most private economists have pared India's growth forecast to 6.2 to 6.5 percent for the 2017/18 fiscal year, citing the impact of the chaotic launch of Goods and Services Tax in July on business activities. Farm output is expected to slow to 2.1 per cent from 4.9 per cent. Services are forecast to grow 7.6% up from 6.9% a year ago.

Here are five things to watch out for in the first advance estimates of GDP data for 2017-18.

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