The economy is now in much better shape than what it was in July, Confederation of Indian Industry President Kris Gopalakrishnan has said.

“We have improved on the current account deficit situation. Our currency (rupee) has stabilised now. So, things are certainly looking up”, Gopalakrishnan told Business Line on the sidelines of Delhi Economics Conclave on Thursday.

Earlier, in his address at the conclave, Gopalakrishnan said that an interesting aspect of the slight up tick in the second-quarter GDP growth is the divergent trends noticed in the industry and services sectors.

The industry sector has picked up somewhat to record a growth of 2.4 per cent which is substantially higher than in the previous quarter. However, the services sector displayed a growth of only 5.9 per cent, which is one of the lowest in recent economic experience.

On the services side, it seems curtailment of government expenditure has reduced the growth rate, along with the slowdown in trade and communication categories, he said. “Considering that the services sector has long been the driving force of the economy, this deceleration is indeed worrisome. On the other hand, as the industry side shows an uptrend, it is likely that the services sector will respond with a lag”, he noted.

>srivats.kr@thehindu.co.in

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