Wednesday saw two disappointing macro numbers: The GDP growth in the first quarter – April to June – of the current fiscal recorded the slowest pace in the last five quarters at 7.1% and fiscal deficit for April-July period at Rs 3.93 lakh crore had already reached 73.3% of the Budget estimate (BE) for 2016-17.

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The June quarter national income was pinned down by slower growth in mining (-0.4%), construction (1.5%) and farm sector (1.8%) and it was propped up largely by a robust growth in services (9.6%) and higher public spending (12.3%).

The previous quarter's GDP numbers were lower than 7.5% in the same quarter last years and 7.9% in the fourth quarter of FY16.

This has raised doubts over whether the government would be able to meet the current fiscal's economic growth target.

D K Srivastava, chief economic advisor, EY India, said there was a "good chance" that the target would be met with effects of a good monsoon kicking in the coming quarters.

"There is a good chance of meeting the annual target because in next quarter agricultural growth would definitely pick up and with a better monsoon, rural income would increase. Urban incomes might also increase because of seventh pay commission payoffs and therefor demand will also pick up. So, one might expect that one might still be on course for meeting the annual target," said the EY economist.

Anis Chakravarty, lead economist, Deloitte India, said even though the latest GDP print showed that growth momentum had decelerated in the June quarter, it had remained above the crucial 7%-mark.

"This continues to depict the fact that growth is still coming from certain parts of the economy and is yet to achieve a sustainable mix," he said.

Chakravarty said the government expenditure growth at 19% had helped the overall number in the first quarter while the investment momentum remained weak as it continued to show contraction.

Despite a slow start to the fiscal, he said he would hold on to his earlier annual forecast of 7.6% growth on the expectation of a revival in rural consumption demand in coming quarters.

"We stick to our forecast of growth around the 7.6% handle, which essentially means that any acceleration from the previous year is likely to be minimal. The industry continues to remain weak on the back of global challenges and domestic demand taking some time to pick up. Growth will likely get a boost from consumption in the second half due to a pickup in rural consumption helping the industry in some parts," said the Deloitte economist.

For Aditi Nayar, senior economist, Icra Limited, the GDP print for the first quarter was as expected.

"GDP growth was supported by private and government consumption activity in Q1 FY2017, as well as a smaller drag from net exports," she said.

Interestingly, the gross value added (GVA) growth for the June quarter came in higher at 7.3% than GDP growth.

Srivastava explained it was due to the contribution of indirect taxes paid on subsidies; "in particular, subsidies have shot up and this is because a lot of pending payment that was due last year have now been paid off in the first quarter and that is the reason why subsidy numbers have shot up".

He expected even the subdued private consumption, which came in at 6.7% in Q1 compared to 8% in Q4 of FY16, to pick up in the coming quarters.

For him, the real issues of concern were the slowdown in construction, which he feels could be addressed through policy initiatives, and the structural issue relating to revenue deficit at Rs3.30 lakh crore in the first four months of FY17 touching 93.1% of the BE.

"This could have an adverse impact on overall savings in the economy. So saving rate is going down while at the same time we also know that investment is going down that is visible in the gross fixed capital formation, which went down by 3%. It is saving-investment profile which is more of concern. And that is a structural concern that one has to be cautious about," warned Srivastava.

The revenue and expenditure data released by Controller General of Accounts (CGA) showed that the total expenditure at Rs6.57 lakh crore during April-July had already touched 33.2% of the current year's estimates.

During the same period, non-tax revenue, including interest receipts and dividend, was Rs 34,098 crore or 10.6% of BE and total receipts from revenue and non-debt capital of the government was Rs 2.63 lakh crore or 18.2% of the estimates.

Central Statistics Office (CSO) data published on Wednesday revealed that agriculture grew 1.8% in the last quarter compared with 2.3% in the March quarter while mining growth contracted 0.4% against 8.6% growth during the same period. The construction sector also decelerated significantly to 1.5% from 4.5%.

Even as Indian economy's growth slowed in the first quarter, it was still faster than China's 6.7% growth in the same quarter.