The Indian economy is likely to grow at 7.4 per cent in 2025-26, up from 6.5 per cent in the previous fiscal, mainly on account of better performance of manufacturing and services sectors, as per the government data released on Wednesday.
The Indian economy recorded a six-quarter high growth of 8.2 per cent in July-September, as factories churned out more products in anticipation of a consumption boost from the GST rate cut, according to government data.
Indian economy grew by 7.8 per cent in April-June -- the highest in five quarters -- before the disruptive US tariffs were imposed.
India no longer needs big ticket reforms but small and basic ones to drive the growth forward, Chief Economic Advisor V Anantha Nageswaran said on Monday. Addressing the media after the Economic Survey 2023-24 presented in Parliament, Nageswaran said there is a need to pursue all possible approaches without any ideological orientation. "In terms of the kind of reforms that we need to do, it is no longer big-ticket reforms that dominate your front pages but more about grunt works.
Investment growth moderated slightly in the economy during the first quarter (Q1) of the current financial year (2023-24, or FY24), notwithstanding the front-loading of capital expenditure (capex) by the Centre. This was also the case despite a pick-up in demand during the period after two dismal consecutive quarters. Although growth in gross fixed capital formation (GFCF), representing investment, fell to a five-quarter low of 7.96 per cent, the comparison with the first two quarters of the previous year is a bit askew due to the low year-on-year (Y-o-Y) base of those periods.
As a percentage contributor to nominal GDP, PFCE's share was 60.1 per cent in FY23, compared with 59.6 per cent and 60.8 per cent in the two preceding fiscal years. "Although PFCE is expected to grow 7.7 per cent in FY23, we believe it is still short of a broad-based recovery. "The current consumption demand is highly skewed in favour of goods and services consumed largely by the households falling in the upper income bracket. "A broad-based consumption recovery, therefore, is still some distance away," said Sunil Kumar Sinha, principal economist with India Ratings.
The critical information in the first quarter (Q1) gross domestic product (GDP) data relates to the proximity of real and nominal GDP growth rates at 7.8 per cent and 8 per cent, respectively. The implicit price deflator (IPD)-based inflation is only 0.2 per cent. This phenomenon has repeated after fifteen quarters.
India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period, as per the National Statistical Office (NSO) data released on Thursday. India remains the fastest-growing major economy as China's GDP growth in the April-June quarter was 6.3 per cent.
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
Their implementation is expected to create investment owing to improving ease of doing business as well as initiating pro-worker measures.
Enthused by higher than expected GDP numbers in the fourth quarter of 2022-23, Chief Economic Adviser (CEA) V Anantha Nageswaran on Wednesday said India's economic growth may exceed the initial estimate of 6.5 per cent in the current fiscal and the country can look for another year of solid economic performance.
India's economic growth slowed down to 4.4 per cent in the third quarter of 2022-23 mainly due to poor performance of the manufacturing sector. In October-December 2021, the economy grew by 11.2 per cent and by 6.3 per cent in the July-September 2022 quarter, according to data released by the National Statistical Office (NSO) on Tuesday.
The real requirement for the finance minister's explanatory speech is to explain the measures taken in the Budget to influence inflation and growth not just through the announcement of a deficit goal, but more broadly through the impact on money supply, consumer demand, foreign trade and investment, explains Nitin Desai.
During the six-month period (April-September 2019), the Indian economy grew 4.8 per cent as against 7.5 per cent in the same period a year ago.
Beside manufacturing, deceleration was also witnessed in sectors like agriculture, construction and electricity, gas and water supply.
GVA growth in the manufacturing, farm and construction sectors tumbled.
In fact, India's investment activity growth is also estimated to touch a 17-year low in FY20. With overall demand not showing signs of revival, investment activity may take longer to recover, economists said.
The CSO estimate is, however, a bit lower than 7.4 per cent growth projected by the Reserve Bank for the current fiscal.
After navigating the turbulent pandemic waves, the recovering Indian economy is now sailing through unchartered waters of rising coronavirus cases, spiralling commodity prices and spiking inflation though the lighthouse of sustainable growth remains visible. As 2022 begins, a raft of developments, ranging from Budgetary announcements to continuation of stimulus measures to monetary policy, will set the tone for the domestic economy, which is projected to grow more than 9 per cent in the current fiscal ending March 2022. The country's continuing massive vaccination drive and 'precaution' doses starting for select categories of people this month will provide a firewall against any steep spike in coronavirus cases amid the emergence of the Omicron variant.
India's growth slowed in three months through December from a revised 7.4% expansion in the previous quarter, but it was much stronger than expected.
Latest official data shows that investment is, in fact, showing signs of a moderate pick-up.
India's GDP is estimated to contract by a record 7.7 per cent during 2020-21 as the COVID-19 pandemic severely hit the key manufacturing and services segments, as per government projections released on Thursday. Amid overall decline in economic activities, some respite was provided by the agriculture sector and utility services like power and gas supply, which have been projected to post positive growth during the current fiscal ending March 2021.
Economists, however, caution against interpreting the data as a broad-based revival
The previous high in quarterly GDP growth was recorded in the January-March quarter of 2015-16 at 9.3 per cent.
The previous high GDP growth of 8.1 per cent was recorded in April-June quarter of 2016-17.
The survey, however, said that GDP is expected to revert to growth terrain next year, when it is likely to grow by 7.2 per cent.
This is mainly due to GST impact on manufacturing and subdued farm output.
India said its economy grew 7.3 percent in the October-December quarter.
RE of GDP for 2015-16 show that the economy grew 7.9% in 2015-16, rather than the earlier estimate of 7.6 per cent.
This time there has been a rather peculiar criticism of the latest GDP numbers.
Slight recovery in growth is expected only in July-September.
GST rate cut for real-estate, income transfer scheme, farm loan waivers execution and recapitalisation of PSU banks have the potential to boost India's growth in a few months, says Neelkanth Mishra.
Improved performance of manufacturing, services and trade sectors helped boost GDP
Inclusive growth is about enabling wider participation in the growth story, but the current if fiscal debate is about how to compensate losers using annual Budgets, says Rathin Roy.
Agriculture, which accounts for 14% of GDP grew at 3.2% in the quarter
It is too late in the government's term for it to pull its usual trick of blaming the last guys.
While India's GDP growth slowed to five-year low of 5.8% in Q4, China grew at 6.4%.
India is only on the starting block.
Manufacturing sector grows at 3.5%; agriculture sector at 3.8%
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