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Signalling a turnaround for the economy and adding to the current festive cheer, the first quarter (April-June) GDP growth came in at a higher-than-expected 5.7 percent.
This was higher than the 4.7 percent growth recorded in April-June quarter last year, official data released on Friday showed.
This latest growth performance is the highest in the last nine quarters.
The Q1 GDP growth has been buoyed by sharp turnaround in manufacturing coupled with strong show by mining and construction sector.
Agriculture sector output grew 3.8 per cent in April-June this year, slightly lower than 4 per cent growth in same quarter last year.
Electricity output grew robust 10.2 per cent as compared to 3.8 per cent in same quarter this year.
Trade, hotels grew 2.8 per cent (1.6 per cent).
The strong first quarter GDP growth could cheer the stock markets on Monday and may take the benchmark nifty index to psychologically important mark of 8,000, say capital market observers.
INDUSTRY THRILLED
Assocham President Rana Kapoor said the Q1 GDP growth performance was above the chamber's expectations.
"It will only pick up further from here and Indian economy is well poised to reach six percent or may even cross the six percent mark for the full year 2014-15", Kapoor said.
A sharp reduction in crude oil prices will also help the economy in terms of generating extra consumer demand that will play a positive effect going forward, he said.
CII Director General Chandrajit Banerjee said the sharp rise in GDP growth to 5.7 percent --after remaining in sub 5 percent range for the last two years--was noteworthy and reinforces faith in India growth story.
"What is encouraging is the return of mining and manufacturing to the positive terrain and the strong uptick in the performance of the electricity and construction sectors",Banerjee said.
In order to convert the first signs of revival into a full-fledged recovery, it is necessary that government continues with the path of implementing the reform agenda so as restart the investment cycle and revive demand in the economy, CII has said.
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