The Indian economy has made a great start to the current financial year. According to the official data, during the first quarter, India’s economy registered a growth rate of 7.8 percent. This is the fastest growth rate of any major economy in the world.
The National Statistics Office (NSO) released the GDP figures for the first quarter on Thursday evening. Factors such as government spending spree, strong consumer demand and higher activity in the service sector helped the Indian economy during the first quarter. Earlier, core sector figures were released, according to which, the growth rate of core sector came down to 8 per cent in July, which was 8.3 per cent in June a month ago.
According to NSO data, India’s GDP growth rate was 13.1 percent in the same quarter a year ago i.e. June 2022 quarter. In comparison, the growth rate this year has been affected. During the first quarter, the agriculture sector registered a growth rate of 3.5 percent, while the growth rate of the construction sector was 7.9 percent. The manufacturing sector disappointed in the first quarter of the current financial year, whose growth rate came down to 4.7 percent.
RBI forecast
Many analysts were expecting that the performance of the Indian economy would be good in the June quarter. The Reserve Bank of India had estimated the GDP growth rate to be 8 percent in the first quarter. This means that the growth rate in the first quarter has been slightly lower than the Reserve Bank’s estimate. According to the Reserve Bank, the country’s economic growth rate may be 8 percent, 6.5 percent, 6 percent and 5.7 percent respectively in the four quarters of the current financial year. In this way, RBI has estimated a growth rate of 6.5 percent for the entire current financial year.
Many agencies increased estimates
Many agencies have recently revised India’s growth rate estimates. The International Monetary Fund had earlier estimated the growth rate for 2023 to be 5.9 percent, which it later revised to 6.1 percent. IMF has estimated the growth rate to be 6.3 percent in 2024. Fitch Ratings had also increased the growth rate estimate for the financial year 2023-24 from 6 percent to 6.3 percent.
This was the performance before this
Earlier, in the March 2023 quarter, the Indian economy had registered a growth rate of 6.1 percent, whereas during the entire financial year 2022-23, the country’s economic growth rate was 7.2 percent. During the last financial year, the Indian economy had performed better than expected. The Reserve Bank had estimated the growth rate to be 7 percent during the last financial year. However, the growth rate was lower than a year ago, because India’s economic growth rate in the financial year 2021-22 was 9.1 percent.
India remains at the forefront
With this good performance, India remains the engine of global growth and also retains its status as the fastest growing major economy. If we look at the performance of other major economies, the world’s largest economy America grew at the rate of 2.1 percent during the June quarter. This rate is on quarterly basis. At the same time, China, the second largest economy, recorded a growth rate of 6.3 percent during the June quarter as compared to the year before.
Condition of other major economies
On an annual basis, Britain’s economy grew at a rate of 0.4 percent during the June quarter, while Germany managed to come out of recession with a growth rate of 0.2 percent. Japan’s growth rate on annual basis during the June quarter was 6 percent.
