Missing expectations but raising hopes of an interest rate cut, the economic growth slowed sharply in the first quarter
India's fiscal deficit in the first four months of the 2016-2017 financial year stood at 3.93 trillion Rupees ($58.69 billion), or 73.7 per cent of the annual budgeted target , official data revealed today.
Missing expectations but raising hopes of an interest rate cut, the economic growth slowed sharply in the first quarter.
The deficit was 69.3 per cent during the same period a year ago. Net tax receipts in the first four months of 2016-17 fiscal year were 2.22 trillion Rupees.
According to the statistics ministry, gross domestic product expanded 7.1 per cent year-on-year in the three months from April-June, down from the stellar growth of 7.9 per cent in the preceding quarter, the AFP reported.
The Indian government received 18.2 per cent of the estimated income from revenue and non-debt capital during the four months, the PTI said.
The numbers also fell short of economists' expectations. Most economists had predicted a slight slowdown in GDP growth to around 7.6 per cent for the quarter.
However, the AFP report further underlined that India retained its place as the world's fastest-growing major economy, with growth having outpaced Asian rival China for more than a year.
"We were hoping for a stronger number," Shubhada Rao, chief economist at Yes Bank in Mumbai told AFP news agency, adding that sluggishness in the construction and mining sectors had weighed on growth.
"There is room for one rate cut from the central bank," she said.
After the government in January 2015 revised its base year to 2011-12 and introduced new methods of calculating expansion which it said were closer to international standards, India's rosy GDP figures have been drawing questions.
Ashutosh Datar, economist at IIFL Institutional Equities, described the growth figure as "disappointing".
"We expected it to remain stable at 7.6 or 7.7 percent," he said while talking to AFP.
(WION with inputs from agencies)