Farm output grew encouragingly by 3.3 per cent year on year during this period but the biggest worry was the slowdown in the manufacturing sector to 7.1 per cent from last year's 9.2 per cent. The Indian Government's ambitious program 'Make in India' has tried to woo foreign manufacturing companies to set up production lines in India.
India's growth overtook that of China in 2015 and has remains higher. But rating agencies and economists have raised concern over the third and fourth quarter growth after PM Narendra Modi announced demonetization as part of a crackdown on tax evaders and counterfeiters.
"The downside risks to India's economic growth still prevail in the form of recently implemented demonetization policy, risks from Brexit, transition of the Chinese economy, protectionist measures adopted by advanced economies and unsolved problem of banks' NPAs (non-performing assets) in India," noted D.S. Rawat, secretary general of industry body ASSOCHAM.
India has targeted eight per cent growth rate for year 2016-17 but at current speed and future prospects, the government may not meet the target.