GDP beats expectations

Nominal growth numbers may pose challenges

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The Indian economy grew at a much faster pace than expected in the first half this financial year.

The data released last week showed that gross domestic product (GDP) expanded by 8.2 per cent at constant prices in the second quarter, taking first-half growth to 8 per cent, up from 6.1 per cent last year. The Reserve Bank of India (RBI) had projected a growth rate of 7 per cent for the second quarter. Growth was supported by increased activity in segments such as manufacturing, which grew 9.1 per cent, and construction, which went up 7.2 per cent. The tertiary sector also recorded a growth rate of over 9 percent. On the expenditure side, private consumption strengthened and grew 7.9 per cent, while growth in investment slowed a bit to 7.3 per cent compared to 7.8 per cent in the first quarter.