“GDP data showing growth of 7.4 per cent in the second quarter of FY2016 indicates that the recovery has gained strength, as we had anticipated,” said Mr. Chandrajit Banerjee, Director General, CII. As the economy recovers further in the second half of the year, GDP growth is likely to exceed 7.5 per cent for the full year. In a year when external demand remains a drag on the economy, this would be considered a strong performance.
He added that the acceleration in the manufacturing sector shows that the government’s policy direction is bearing fruit. The Make in India campaign with its objective of raising the growth rate in the manufacturing sector has begun to make an impact. At the same time, the rural economy remains constrained given two successive years of weak rainfall. The services sectors have performed well, though construction is one sector where the growth rate has fallen significantly. Policy measures therefore need to focus on a revival in project execution in manufacturing, real estate and infrastructure