India growth slows to 7.1pc

India’s economic growth slowed to 7.1 per cent in the second quarter, official data showed yesterday, as its banks endure a liquidity crunch that is hampering investment in Asia’s third-largest economy. GDP expansion missed the rate experts say India must consistently hit if Prime Minister Narendra Modi, up for re-election next year, is to fulfil his pledge of creating millions of jobs.

Central Statistics Office figures showed GDP growth for July to September of the 2018- 19 financial year slowed from 8.2pc in the previous quarter. Despite the slowdown, the latest figures were up from 6.3 percent for the same period last year and reinforce India’s status as one of the world’s fastest-growing economies.

However analysts say the country needs to regularly record growth of at least eight percent to generate employment for the millions of Indians who enter the workforce every year. “India needs to grow at eight percent or over for several years,” Ashutosh Datar, an independent economist based in the commercial capital Mumbai, said. “Any fall in GDP figures below this will have very significant ramifications for the economy. “And anything below seven percent would potentially hamper job creation and also be undershooting our growth potential,” he added.