The Indian economy clocked a GDP growth of 6.7 per cent in the first quarter (April-June) of the financial year 2024-25 over the growth rate of 8.2 per cent in Q1 of FY 2023-24, figures released by the Ministry of Statistics on Saturday showed.
The crucial manufacturing sector that provides quality jobs to the young workforce posted a 7 per cent growth while the construction and electricity sectors posted double-digit growth during the quarter.
“The overall growth in the Q1 of FY 2024-25 has been driven by significant growth in the Secondary Sector (8.4 per cent), comprising of Construction (10.5 per cent), Electricity, Gas, Water Supply & Other Utility Services (10.4 per cent) and Manufacturing (7.0 per cent) sectors,” according to a Ministry statement.
Private Final Consumption Expenditure and Gross Fixed Capital Formation have witnessed growth rates of 7.4 per cent and 7.5 per cent, respectively, during the first quarter, according to the official data.
According to the RBI’s monthly bulletin for August, aggregate demand conditions are gathering momentum after some slack in the first quarter of 2024-25 with a revival in rural consumption on the back of growing incomes. This stimulus to demand is expected to reinvigorate the hitherto subdued participation of the private sector in total investment which will spur growth going ahead. The positive outlook for India comes at a time when “persistent geopolitical tensions, rekindled fears of a potential recession in key economies and financial market volatility in response to monetary policy divergence cast a shadow on global economic prospects even as inflation moderated grudgingly across countries,” the bulletin points out.
The Finance Ministry is optimistic about the outlook ahead as it said in its monthly review this month that the Indian economy experienced a notable upswing across various economic indicators in July 2024. “The month saw impressive milestones being reached, substantial growth in GST collections, and a significant rise in e-way bill generation, which points to an overall increase in economic activity. The stock market indices also reached record highs in July,” the review states.
On balance, India’s economic momentum remains intact. Despite a somewhat erratic monsoon, reservoirs have been replenished. Manufacturing and services sectors are expanding, going by the Purchasing Managers’ indices. Tax collections – especially indirect taxes, which reflect transactions – are growing healthily, and so is bank credit, according to the review.
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