NEW DELHI -- Despite a global economic slowdown and tumbling prices in equities and commodities, officials said that India's gross domestic product will grow to a five-year high of 7.6% in the fiscal year ending March, a figure that analysts are doubtful about.

India's Central Statistics Office said on Monday that real GDP grew 7.3% year-on-year in the October-December quarter. This compares with 7.7% in the previous quarter, after it had been adjusted up from 7.4%. GDP growth for the April-June quarter was also revised up to 7.6% from the previously reported 7%.

The latest figures show India's growth continues to outpace that of China - which grew 6.8% in the last quarter of 2015 -- and cements its position as the world's fastest-growing major economy.

India's growth was led by strong private consumption which was up 6.4% in the quarter from a year ago and a fall of nearly 11% in imports.

Some doubts

"At face value, these are extremely strong figures," Capital Economics said in a report. The latest government statement on GDP "is more likely to deepen doubts about the quality of the official data than improve sentiment towards India's economy," it said.

The report said that household spending in some sectors did not reflect the rise in overall consumption, pointing to auto sales which have been weak since the middle of last year. Also, Capital Economics said that bank lending growth is hovering near the lowest level in over a decade.

Other analysts said that the strong GDP numbers seem to contradict weaker exports, investments and cement production.

Ritika Mankar Mukherjee, an economist at Ambit Capital, said the new GDP number and the information that the government was conveying, not just in terms of levels but also in the direction, seemed "very counter-intuitive."

New way of counting

In January last year, the CSO changed the base year of national accounts from the 2004-05 fiscal year to 2011-12, and altered the formula for calculating the country's GDP. Now, the GDP calculation is based on market price, including indirect taxes, whereas the earlier method took into account the factor cost.

Under the new formula, India's real or inflation-adjusted GDP in the fiscal year ended March 2014 grew 6.9% instead of the earlier-announced figure of 4.7%. For the fiscal year ended in March 2015, GDP growth was 7.2%.

Globally, factors such as plunging oil prices and a slowdown in economic growth, in particular China's, have spooked investors who are eagerly awaiting Federal Reserve Chair Janet Yellen's testimony before the U.S Congress on Wednesday and Thursday for clues about future U.S. interest rate moves.

On Tuesday, Japan's benchmark index the Nikkei 225 dropped 5.4% to close at 16,085.44 following a slump in European and U.S stock markets. That was the Nikkei's worst single-day fall since mid-2013.

Investors rushed to safe haven assets such as gold and yen as markets remained volatile. In a first for a G-7 economy, the benchmark 10-year Japan government bond yield fell below zero on Tuesday.

In India, the BSE Sensex closed at 24,020.98, down 1.10%, on Tuesday.

Against that backdrop, N. R. Bhanumurthy, a professor of economics at the New Delhi-based National Institute of Public Finance and Policy, said that India, being a net oil importer, has benefited from the steep decline in crude prices.

"It (the cheaper oil) would have definitely made significant impact on our external balances, and at the same time on public finances," he told the Nikkei Asian Review.

However, Bhanumurthy said: "To achieve the target of 7.6% annual growth, India needs to grow 7.9-8% in the last quarter of the current financial year."

The government of Prime Minister Narendra Modi has been making all-out efforts to seek foreign investment by projecting the country as a manufacturing hub. But while the government remains positive about the country's growth prospects, it faces the tough challenge of maintaining legislative momentum with several key reforms, including a goods and services tax, remaining stuck in Parliament.

The Indian parliament's next session starts on Feb. 23 and the government is set to present its annual budget on Feb. 29.

"We look forward to the Union Budget giving a positive direction to the economy. The focus should clearly be on introducing measures to further boost domestic investments and demand," said A. Didar Singh, secretary general of Federation of Indian Chambers of Commerce and Industry.

Chandrajit Banerjee, director general of Confederation of Indian Industry, added that the organization was looking forward to "a reform-centric budget which would put in place bold measures to remove supply bottlenecks and in turn spark a virtuous cycle of investment and growth."