GDP growth rate was registered to be much higher in the previous quarters.
India's GDP growth rate for the second quarter (July-September) of the current fiscal stood at 6.3 per cent, government data showed on Thursday.
"We will be updating the forecast for India, including the growth rate, and that will be coming January with the update of our World Economic Outlook", IMF spokesman Gerry Rice said. He has been grappling with slowing growth in the past five quarters, with the economy dragged down by subdued private investments, an unprecedented cash ban imposed a year ago and the introduction of a country-wide consumption tax in July.
Ahead of Gujarat elections, India's GDP (Gross Domestic Product) growth rate for the second quarter of the current fiscal has brought forth reasons for cheer for the Modi Government, was being criticised by opposition as the country's GDP had been sliding for the last five quarters after demonetisation. So it must give policymakers a measure of satisfaction that the slowdown seen during the last fiscal year and in the first quarter has been reversed.
Finance Minister Arun Jaitley remained optimistic of a higher growth rate in coming quarters.
The GDP figures compared the three-month period with the same period the previous year.
RBU may hold rates as economy rebounds to 6.3 per cent in september quarter.
The government demonetized high-value currency notes last November and rolled out the goods and services tax (GST) in July this year, both of which impacted liquidity in the system and supply chains.
The GST, the minister said, has also reduced the compliance burden on traders as under the new regime a trader is not required to file multiple tax returns.
Commenting on the GDP numbers, Finance Minister Arun Jaitley told reporters here that they showed that the impact of the two major structural reforms - demonetisation and GST - "are behind us".
Lower collections after disruptions caused by GST implementation could have affected the growth.
"Also the figure for fixed capital formation means that actually investments are moving up", he added.
Asked why did GDP numbers fall this time Ranadive said, "Trade, hotels, transport and communication that has higher weightage of sales tax has been substituted by GST in the quarter gone by".
He said that the Reserve Bank's upcoming monetary policy review next week "will be a flawless timing to give another shot to boost the sentiment".
"What is encouraging is that manufacturing has emerged as a key driver of growth indicating that firms have started restocking and recovery is taking shape".
According to Anis Chakravarty, Lead Economist, Deloitte India, the latest set of numbers showed improved performance of manufacturing that could have possibly been affected by the GST implementation.
Modi's administration hopes the ratings upgrade can attract more foreign investors, who pumped $15 billion into Indian equities in July-September, up 44 percent from the previous quarter.