The optimism regarding passage of Goods and Services Tax (GST) bill in the ongoing winter session of the Parliament has increased, after top leaders from ruling and major Opposition Party met on Friday evening for negotiations.

Q2 – FY: 2016 real GDP number improves on deflationary trends

The economic growth for Q2 – FY: 2016 came in better than Q1 and was broadly in line with expectations. The Gross Value added (GVA) (basic price) clocked 7.4% YoY in Q2 vs. prior of 7.1% YoY. Meanwhile, Gross Domestic Product (GDP) came in at 7.4% YoY in Q2 vs. 7.0% in Q1.

Even though the GVA and GDP remained robust during the quarter, the corresponding nominal growth slowed down to 5.2% YoY and 6.0% YoY respectively. Higher real growth print vis-à-vis nominal growth indicates deflation in the price index. Sector wise analysis shows deflationary trend in sectors such as mining, manufacturing, construction, trade along with financial and real estate services.

Key observations and implications

India’s GDP accelerates to 7.4% in Q2 FY16 - read more