NewDelhi: India`s economic growth pace is likely to pick up in the three months ending in September, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of a national sales tax.
Analysts are expecting an higher dataprint for the September quarter GDP that will be announced on Thursday, with some of them pegging it at 6.4 percent, after the disappointing performance in the preceding quarter.
Their optimism comes from the improving macroeconomic indicators across sectors, especially those affected by the note-ban that had dragged down the June quarter numbers.
Growth had slid to a three-year low of 5.7 percent for the three months to June on the spillover effects of the note ban and the GST implementation.
The data could help Prime Minister Narendra Modi, who is facing criticism over the hasty July launch of Goods and Services Tax (GST) – aimed at transforming India`s 29 states into a single customs union – but hitting millions of small businesses due to complex rules and technical glitches.
Big companies have largely adjusted to the changes while benefiting from reduced logistics costs.
In July-September, auto sales, manufacturing, electricity generation grew more quickly than in the previous quarter.
The economy also has moved past the disruptions encountered after India`s shock ban on high-value banknotes in November 2016, economists say.
“GDP would bounce back with better credit growth, investment growth and growth in exports, as Indian economy has the potential to grow at 8 to 10 percent. As GST is also stabilizing, it will also help in that,” Chief Economic Advisor Arvind Subramanian had said earlier this week.
Bureau Report
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