New Delhi, Dec 29 (PTI) Finance Minister Arun Jaitley today dismissed as "exaggerated" the suggestion that India's growth rate plummeted to an all-time low, saying that for the last three consecutive years, the country has remained the fastest growing economy in the world.

Jaitley's remarks came after TMC MP Saugata Roy said the country's growth rate plummeted to an all-time low of 5.7 per cent in the first quarter of 2017-18 and showed only a small rise in the second quarter.

"The honourable member's phraseology, with utmost respect to him, is somewhat exaggerated. Our economy, for three years in a row, is the world's fastest growing economy," he said in Lok Sabha during the Question Hour.

The minister said this year, even the IMF and the World Bank have said that by 0.1 per cent, India will be the second fastest growing economy.

"Therefore, to exaggerate that situation to say that we have hit the bottom and that it is a 'rot' that has set in is somewhat not correct," he said.

When Roy clarified that he used the word "rut" not "rot", Jaitley said "rut is worse than rot".

"It is somewhat an exaggerated explanation or analysis as far as the economy is concerned. Let me tell you that in the first quarter, if one analyse the data in detail, the services sector rose by 8.7 per cent which was quite robust, which actually meant that people were making purchases," he said.

The minister said there was no demonetisation effect visible as there was currency available with people in order to make the purchases.

"It is because the 1st July date for GST has been announced in advance, the destocking itself was taking place and manufacturing for that quarter had remained suspended which we have seen in the next quarter that it has suddenly picked up.

"The second quarter detail itself reflects that. All indications seem to suggest that in the coming quarters the curve is going to be on an upward swing," he said.

Jaitley said as far as expenditure is concerned, in the second quarter, the manufacturing sector has touched seven per cent level.

"Therefore, when the manufacturing sector touches seven per cent level, to say that the government should go in for tax cuts and for larger fiscal deficits, which are measures the government takes in extreme situations, is not proper," he said.

Economic growth rebuttal: minister says sectoral data show recovery and argues against emergency tax cuts or larger deficits. The Finance Minister rejected claims of a severe economic downturn as exaggerated, stating India remained one of the fastest growing economies. He emphasised robust services growth in Q1, attributed Q1 manufacturing weakness to GST related destocking (not demonetisation), and noted manufacturing recovered by Q2 to around seven percent. On that basis he argued against emergency fiscal measures like tax cuts or larger deficits, viewing them as inappropriate for the current cyclical situation.