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(Current Affairs) Economy & Energy | October: 2016

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Economy

First quarter saw decline in GDP growth

  • India’s Gross Domestic Product (GDP) growth slowed to 7.1 per cent in the first quarter of this financial year, with private consumption still the mainstay of the expansion.
  • GDP growth stood at 7.9 per cent in the fourth quarter (January-March) of the previous financial year and at 7.5 per cent in Q1 of 2015-16.
  • The slowdown in the first quarter of this year was mainly driven by a slowdown in mining, construction and agriculture sectors.
  • The construction sector grew at only 1.5 per cent in Q1 of 2016-17 compared with 5.6 per cent in the same quarter of the previous year.
  • The mining sector saw a contraction of 0.4 per cent in Q1 of 2016-17 compared with a strong growth of 8.5 per cent in April-June last year.
  • In agriculture, the effect of a better monsoon will be reflected more in the next quarter rather than in April-June.
  • The sector grew at 1.8 per cent in the period under review compared with 2.6 in the same quarter of the previous year.
  • Another concern is to do with the imbalance between private consumption and capital formation, with the former being the main bolster for growth.
  • Private consumption expenditure grew 6.8 per cent in the first quarter, slightly slower than the 6.9 per cent in the year earlier period.

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