There is good news for Prime Minister Narendra Modi’s government as elections are approaching fast. The Indian economy grew at a 15-quarter high of 8.2 percent in the April-June quarter of current fiscal on a good show by manufacturing and farm sectors, according to government data released on Friday. The growth cemented India’s position as the fastest growing major economy, clocking higher expansion rate than China’s 6.7 in the same quarter. The gross domestic product (GDP) at constant (2011-12) prices in the first quarter of 2018-19 is estimated at ₹33.74 lakh crore, against ₹31.18 lakh crore in Q1 of 2017-18, showing a growth rate of 8.2 percent. 

Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a period (quarterly or yearly) of time. Nominal GDP estimates are commonly used to determine the economic performance of a whole country or region, and to make international comparisons. The previous high quarterly GDP growth was recorded in July-September period in 2014-15 at 8.4%. As per the data, the quarterly GVA (gross value added)  at basic prices for Q1 2018-19 from the ‘manufacturing’ sector grew by 13.5%, compared to a contraction of 1.8% in Q1 2017-18. The Quarterly GVA at basic prices for Q1 2018-19 from ‘agriculture, forestry, and fishing’ sector grew by 5.3% as compared to growth of 3% in Q1 2017-18. 

Thus there has been a better performance by the economy. While the latest growth numbers are quite robust, the volatility in oil prices and rupee value is exerting some pressure on industry members. These two factors have emerged as the key macro-economic concerns on the horizon. These factors can weigh heavy on the growth performance besides having clear implications on the current account and fiscal deficit. However, economists remained skeptical of sustaining the growth momentum in the coming quarters. But, not the government, which now expects that even its projections of up to 7.5 percent growth in FY19 may be crossed. But part of the spurt in growth can be traced to a low base effect as the economy was held back by the twin shocks of the GST and demonetisation in the previous year.