Finance Ministry officials hope the central bank will cut interest rates soon, but analysts say that rising global oil prices, which could pinch consumers through higher inflation, may instead force the RBI to hike in the second half of 2018, denting growth momentum. "This also indicates that perhaps the impact of two very significant structural reforms - demonetisation and GST - is behind us and hopefully in coming quarters we can look for an upwards trajectory", he said after the Central Statistics Office released the GDP data.
Commenting on the demonetisation drive a year ago and its impact on India's growth, Anant said the move will be very hard to read from GDP numbers. The finance minister said a cogent GST mechanism has been developed and no country in the world has 5 per cent tax rate.
Jaitley further said, "Government's reforms to push economic growth are working, (and it) can be seen from that: manufacturing has shown robust growth of 7 per cent in Q2 and services at 7.1 per cent". Gross fixed capital formation has increased from 1.6% in Q1 to 4.7% in Q2.
Israeli aircraft reportedly attack Iranian military base near Damascus
An Israeli military spokeswoman had declined to comment on earlier reports of such an attack overnight. Iran and Lebanon's Hizballah movement are allied with Syrian President Bashar al-Assad.
Underlining the strong fundamentals of the economy, Finance Minister Arun Jaitley on Thursday said India has standardised itself for a growth rate of seven per cent to eight per cent.
Modi government hopes the ratings upgrade can attract more foreign investors, who pumped Dollars 15 billion into Indian equities in July-September, up 44 percent from the previous quarter. "In the previous quarter, businesses were delaying production amid preparations for the GST launch", he said, adding that the output in the September quarter is primarily for consumption and sales.
While manufacturing grew rapidly at 7% in the September quarter from merely 1.7% in the first quarter (April-June), the growth in electricity and other utilities was recorded at 7.6% and it was nearly 10% in trade, hotel, transportation and communication.
The agriculture, forestry and fishing sector is estimated to have grown by 1.7 per cent.
TMC chief and West Bengal Chief Minister Mamata Banerjee was, however, more vocal in her criticism and claimed that a growth of 6.3 per cent was "no growth".