India’s GDP grew at a slower pace in October-December 2015 (third quarter FY2015-16) at 7.3 per cent due to the negative growth seen in the farm sector. GDP had grown by 7.7 per cent in July-September 2015 (second quarter).

The Central Statistics Office has, however, forecast that for the whole of 2015-16 India will grow at a five-year high of 7.6 per cent, overtaking a slowing China, on the back of improvements in manufacturing and farm sectors.

But for the CSO’s forecast to materialise, India will have to grow at a rate of 7.8 per cent in January-March 2016 (fourth quarter FY2015-16). China grew at 6.9 per cent in 2015.

India’s GDP had grown by 7.2 per cent in 2014-15. The previous high at 8.9 per cent was recorded in 2010-11.

The manufacturing sector is estimated to grow at 9.5 per cent in 2015-16, up from 5.5 per cent a year ago. The agriculture sector is projected to grow at 1.1 per cent, as against a decline of 0.2 per cent a year ago. The growth of the mining and quarrying sector, electricity and power supply and other services is likely to see a deceleration in the current financial year.

“A closer look at the breakup shows that growth for the full year will be powered by a pickup in manufacturing as the services sector is expected to witness a marginal slowdown. This has important implications for the overall economy as the government has been trying to give a push to this sector,” said Anis Chakravarty, senior director and lead economist at Deloitte India. He pointed out that the manufacturing sector, along with agriculture, were the only two sector sub-components that are likely to show a higher growth. “On the expenditure side, investments are likely to grow by 5.3 per cent for the full year, compared to 4.9 per cent in the previous year, which shows that capex is stable and probably moving up. Overall, we would treat this as a positive development,” said Mr Chakravarty.

As per the data for the third quarter, the agriculture sector witnessed a contraction of one per cent. Manufacturing, however, grew at 12.6 per cent, and mining by 6.5 per cent.