India grows 7.2 percent in the last quarter (October-December) to regain its status of becoming the world largest growing economy in that period.
Government spending and pick up in manufacturing and services boosted the GDP growth.
India is Asia’s third-largest economy. It grows to its fastest pace in the last five quarters to surpass China who grew by 6.8 percent in the annual phase at the same time.
The overall GDP growth of India has increased from 7.1 percent last year to 7.2 percent this year. The last time India grew to a higher pace was in the last quarter of 2016.
Earlier, Analysts from Reuters had suggested that the GDP was expected to grow by 6.9 percent as compared to the last quarter of 6.3 percent from July to September.
India’s manufacturing and service industries have been overcoming disruptions after the launch of GST in July to mark the improvement. A director at Arihant Capital Markets said,” Settling down of GST reforms will boost growth in next fiscal year.”
The growth figure is not expected to change for monetary policy. However, the govt. might balance inflation.
“RBI has to balance between growth and inflation. The recently released minutes of the MPC’s last policy meeting showed growing concerns of embers over continued inflationary risks arising from high food and crude prices,” Gandhi added.
The GDP data will help the Prime Minister Narendra Modi. He is facing a lot of criticism over Rs12600 bank fraud at Punjab National Bank this month. Last week Modi told the industrialists that the government is trying its best to put the economy back to a high in order to recover the debt. He is also trying accelerating growth through higher state spending.