New Delhi: India has overtaken China to become the world’s fastest growing economy by clocking 7.5% GDP for the March quarter, prompting Finance Minister Arun Jaitley to say that the economy is clearly on “a recovery path”.
The economic growth rate on sequential basis improved from 6.6% in the third quarter (October-December) of the financial year 2014-15. For the fiscal as a whole, the GDP grew by 7.3%, up from 6.9% a year ago, mainly due to improvement in services and manufacturing sectors.
The fourth quarter GDP data, Jaitley said, “gives us a broad idea of how the Indian economy is moving. It is absolutely clear that the economy is in a recovery mode”.
The performance of manufacturing and services indicates that “we have a potential to grow at 8-9 per cent and beyond”, the Minister added.
While manufacturing sector output grew by 8.4% in the fourth quarter of last fiscal ended March 31, 2015, services sector including trade, hotels, transport and communications clocked a robust growth rate of 14.1%.
The fourth quarter GDP growth rate of 7.5% was better than China’s 7.4% making India the fastest growing economy in the world.
Jaitley dismissed former Prime Minister Manmohan Singh’s comments on the state of the Indian economy saying an economy growing at fastest pace in the world cannot be ‘fragile’.
“In a global slowdown situation, to have the fastest growth rate in the world certainly does not make Indian economy fragile,” he said.
Industry chambers hailed the uptick in growth data but underlined the need for more initiatives on the ground level to improve investor sentiment and realise the true potential of the Indian economy.