New Delhi. India’s economy has slowed down to a growth rate of 6.7 percent in the April-June quarter of this fiscal year, compared to 8.2 percent in the same period a year ago. According to data released by the government on Friday, this decline is mainly due to the poor performance of the agriculture sector. However, India still remains the world’s fastest growing major economy, as China’s GDP growth rate stood at 4.7 percent in the same quarter.
Performance of Agriculture and Manufacturing Sector
According to data from the National Statistical Office (NSO), the agriculture sector registered a growth of only 2 percent in this quarter, compared to 3.7 percent in the same period last fiscal. On the other hand, the manufacturing sector performed better and achieved a growth rate of 7 percent in the first quarter of the current financial year, compared to 5 percent in the same period a year ago.
Editor’s Take | India Q1 GDP: India’s growth is expected to slow to a 5-quarter low of 6.9%, with some estimates as low as 6%. However, for the markets, the GDP numbers may not be major market-moving figures.
here is @nikunjdalmia‘s take it. pic.twitter.com/YT4l2UGMDa
— ET NOW (@ETNOWlive) August 30, 2024
Good growth of secondary sectors
Apart from the agriculture sector, secondary sectors including manufacturing and power industries registered a growth of 8.4 percent on an annual basis. The growth rate of these sectors was 5.9 percent in the same period of the previous fiscal. The growth rate of trade, hotels, transport, communication and broadcasting-related services was 5.7 percent on an annual basis, which was 9.7 percent in FY 2024.
Estimation of GVA and GDP in the first quarter
Real gross value added (GVA) is estimated to be Rs 40.73 lakh crore in the first quarter of 2024-25, as against Rs 38.12 lakh crore in the first quarter of 2023-24, i.e. a growth rate of 6.8 per cent. At the same time, nominal GVA is estimated to be Rs 70.25 lakh crore, as against Rs 63.96 lakh crore a year ago, i.e. a growth rate of 9.8 per cent.
RBI and Moody’s estimates
The Reserve Bank of India (RBI) in its last monetary policy committee meeting had estimated that the GDP growth rate would be 7.1 percent in the first quarter of FY 2025. Credit rating agency Moody’s has also expressed a positive outlook on India’s economic growth for FY 2024 and 2025 in a recently released report. Moody’s has estimated that India’s GDP will grow at 7.2 percent in FY 2024 and 6.6 percent in FY 2025. Despite this decline in India’s economy, experts believe that the country’s economy will continue to be strong amid global and domestic challenges.
