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"The latest growth outturn is in line with RBI's recent rhetoric and thus shouldn't move the needle on interest rates".

GST has consolidated central and local taxes including value added tax, excise and service tax into a single levy.

He said deceleration trends in overall growth witnessed since Q1 of the last fiscal year had been reversed.

Finance Minister Arun Jaitley on Thursday said India has standardised itself for a 7-8 per cent growth rate on the back of improving macroeconomic fundamentals.

Syncing with recent Moody's upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy comes at a time when the Modi Government has been facing Opposition charges of wrong implementation of demonetisation and GST that disrupted the $2.4-trillion economy.

Government spending slowed in the quarter, growing 4.1 per cent, as against 17.1 per cent in the June quarter.

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".

Former finance minister P Chidambaram, a senior leader of the opposition Congress Party, said the result was "far below the promise of the Modi government and far below the potential of a well-managed Indian economy".

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. The reasons for the foreseen growth recovery are many: a rise in industrial production and exports, restocking by businesses after the transition to GST and some major festivals that would have boosted consumer demand.

According to Central Statistics Office (CSO) data, the economic activities that registered growth of over 6 percent in the second quarter are manufacturing, electricity, gas, water supply, other utility services and trade, hotels, transport and communication, and services related to broadcasting.

"Manufacturing has emerged as bright spot at seven per cent but agriculture remains an area of concern with mere 1.7 per cent in the second quarter against 2.3 per cent in the previous quarter". Since May 2014, out of the 13 quarters, we have clocked upwards 7 per cent eight times, and we fell below 6 per cent only once in the last quarter.

Mining also posted a sharp uptick in growth to 5.5 per cent from a decline of 0.7 per cent in the previous quarter.


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