India, currently the fastest-growing economy in the world, grew at 5.6 percent in November 2016 on a year-on-year (YoY) basis, while the growth rate for the April-November 2016 period in FY2017 was 6.5 percent. The growth rate in the corresponding period last fiscal (April-November 2015) was 6 percent.
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The estimates were released by Motilal Oswal Securities Ltd. (MOSL) on Tuesday, citing its monthly economic activity index (EAI).
"Our preliminary estimates reveal that as against a growth of 6.8% YoY in October 2016, India's EAI grew 5.6% YoY in November 2016. It implies a growth of 6.5% YoY in the first eight months of FY17, as against 6% growth witnessed in the corresponding period last year," MOSIL said in a report.
Growth in consumption was high during November 2016 as was evident from various indicators.
"...a 29- month high growth in passenger traffic (railways + aviation), 14-month high growth in real rural wages, and reasonably strong growth in government's revenue spending, petrol consumption and production of consumer durables helped consumption to grow 8.4% YoY in November 2016, following double-digit growth in October 2016," Nikhil Gupta, author of the report, said.
These sectors managed to limit the damage caused in other areas of the economy.
"In November 2016, 24-month high growth in cargo traffic, 7- month high growth in power generation, and an expected growth of ~5% in production of capital goods more than offset the 33-month worst decline in auto sales, weak growth in construction and continued fall in capital goods imports (please see Exhibit 8 for heat map). Investment index shrank 2.5% YoY in April-November 2016, as against a growth of 3.5% in the corresponding period last year," he said.
