INSUBCONTINENT EXCLUSIVE:
The Indian economy easily surpassed the 6.7 per cent growth posted by China for the same quarterNew Delhi: India's annual economic growth
surged to a more than two-year high of 8.2 per cent in the three months through June, powered by a strong performance of manufacturing and
consumer spending.Should the economy keep up this momentum it will stand Prime Minister Narendra Modi in good stead when he seeks
re-election next year, and dispel some of the criticism that his economic reforms haven't resulted in faster growth sooner.The latest
period's annual pace beat a Reuters poll forecast of 7.6 per cent, and was the highest since India logged 9.3 per cent growth in the
January-March quarter of 2016.It easily surpassed the 6.7 per cent growth posted by China for the same quarter, and it restored India's
growth to levels posted by the Congress governments during the decade before PM Modi's Bharatiya Janata Party swept to power in 2014.In
the same quarter last year, India's growth languished at 5.6 per cent - far too slow to generate jobs for the mass of young people joining
the labour market each year.Still, India's $2.6-trillion economy surpassed France's in 2017 to become the world's sixth largest, and
it was not far behind the United Kingdom, according to World Bank data.Better rainfall this year, and government spending have given
households more money to buy consumer durables, which helped the manufacturing sector post 13.5 per cent growth in June quarter, in sharp
contrast to the 1.8-per cent contraction recorded a year earlier."This is probably the best GDP trend we have seen in the first half of the
fiscal year," said Shashank Mendiratta, India economist at ANZ Bank
(What economists say on GDP data)He said that with a general election less than a year away the GDP numbers were mostly driven by public
investment and higher consumption especially in the rural areas."We expect RBI to hike rates in March-quarter next year with no changes this
year," he said.On Wednesday, India's central bank said economic growth was expected to accelerate to 7.4 per cent in the fiscal year
ending next March, bettering the 6.7 per cent posted last fiscal year, despite risks posed by higher oil prices and global trade
tensions.Sustainable gainsSome analysts said a recent uptick in investments and manufacturing is likely to sustain as order books have
increased on account of infrastructure, affordable housing and exports.But others have warned with the rupee depreciating and oil prices
rising, the economy could cool to about 7.2 per cent in October-March period.The Reserve Bank of India has raised its benchmark repo rate by
a total of 50 basis points at its past two meetings, to 6.5 per cent, to tame inflation that has remained above its medium-term target of 4
per cent for the last nine months.The RBI's next policy is due on October 5.In July, retail inflation eased to 4.17 per cent from a year
earlier, but is projected to remain around 4.8 per cent in the second half of the fiscal year.The rupee has lost 10 per cent value against
the dollar this year, touching a record low of 71 to the dollar in opening trade on Friday, and is the worst performing currency in
Asia.Credit ratings agency Moody's has warned about rising pressure of higher oil prices and interest rates on government finances and
India's current account.ANZ's Mr Mendiratta said: "Going ahead I expect growth to moderate as private investment is unlikely to grow at
