Following the release of India’s Q1 growth figures earlier this week, Prime Minister Narendra Modi on Friday said that India’s economy had overcome a difficult phase, and added that sluggish private investments were a legacy from the time of the previous UPA government.
In an interview to Network 18 channel, Modi said that India’s economy has "seen off the worst" and the government "didn’t want to take shortcuts to give it an artificial sugar rush".
He also noted that sluggish private investments were a "continuing blowback from before the time he took office".
Data from the Central Statistics Office earlier this week showed India’s gross domestic product (GDP) slowed to 7.1 per cent for the first quarter of this fiscal, from 7.5 per cent in the like period of 2015-16, mainly owing to lower activity in farm, mining and construction sectors, even as India Inc. said the numbers reflected a moderation of growth impulses.
The country’s growth rate of 7.6 per cent during the previous full fiscal had made India the fastest expanding major economy globally, overtaking China.
Gross fixed capital formation — a monetary measure of activities like building of infrastructure, schools and hospitals and investments in plant and machinery — fell to 29.6 per cent of GDP from 32.7 per cent in the previous year.
Commenting on the data, industry body Assocham said that the estimate of GDP at constant price signals "moderate slow down in the economic growth" as compared to the same quarter of last year.
"Policy actions and initiatives taken by government and RBI have had marginal positive effects on economic growth in India and have helped in restoring the economic stability in India against global economy which is volatile and weak," Assocham Secretary General D.S. Rawat said.
"Private consumption remained the mainstay of the modest acceleration in real GDP growth, as in 2014-15 and 2015-16, while fixed investment and exports are missing drivers due to new business orders slowing and weak external demand, respectively," he added.