New Delhi: India’s economic growth slowed to a near two-year low of 5.4 percent in the July-September quarter of this fiscal year due to poor performance of the manufacturing and mining sectors as well as weak consumption, but the country continued to remain the fastest-growing large economy, according to data revealed on Friday, September 29.
The gross domestic product (GDP) had expanded by 8.1 percent in the July-September quarter of the 2023-24 fiscal year and 6.7 percent in the first quarter of the current fiscal year (April-June 2024).
The previous low level of GDP growth at 4.3 percent was recorded in the third quarter (October-December 2022) of the financial year 2022-23.
The data also showed that the growth of private final consumption expenditure (PFCE), which indicates consumer spending, decelerated to 6 percent in the September quarter from 7.4 percent in April-June this year.
However, India remained the fastest-growing major economy, as China’s GDP growth in the July-September quarter this year was at 4.6 percent.
“Real GDP growth print of 5.4 percent is on the lower side, and it is disappointing, but there are some bright spots,” Chief Economic Advisor V Anantha Nageswaran said while addressing the media.
Agriculture and the allied sector and the construction sector are some of the bright spots, he added.
Commenting on the data, Aditi Nayar, Chief Economist and Head of Research & Outreach, ICRA Ltd., said: “GDP growth dipped much sharper than expected to a tepid 5.4 percent in Q2 FY25, with a number of sectors throwing up negative surprises, especially the anaemic outturn of manufacturing growth and the marginal contraction in mining, as well as a slower-than-projected growth of the services sector.”
According to the National Statistical Office (NSO) data, the growth of the agriculture sector GVA (Gross Value Added) accelerated to 3.5 percent in the latest July-September quarter from 1.7 percent a year ago.
The GVA in the manufacturing sector slowed to 2.2 percent in the second quarter of the current fiscal year compared to an expansion of 14.3 percent in the year-ago period.
As per the data, the output (GVA) in the ‘mining and quarrying’ sector contracted to 0.01 percent in the second quarter against a growth of 11.1 percent a year ago.
The expansion in financial, real estate, and professional services’ GVA was 6.7 percent, up from 6.2 percent in the year-ago quarter.
Electricity, gas, water supply, and other utility services grew by 3.3 percent, slower than 10.5 percent a year ago.
The construction sector recorded a growth of 7.7 percent in the second quarter, down from 13.6 percent year on year.
The growth in gross domestic product (GDP) during the April-June quarter of 2024-25 remained unchanged at 6.7 percent.
“Real GDP, or GDP at constant prices, in Q2 of 2024-25 is estimated at Rs 44.10 lakh crore, against Rs 41.86 lakh crore in Q2 of 2023-24, showing a growth rate of 5.4 percent,” the NSO said in a statement.
Nominal GDP, or GDP at current prices, in Q2 of 2024-25 is estimated at Rs 76.60 lakh crore, against Rs 70.90 lakh crore in Q2 of 2023-24, showing a growth rate of 8.0 percent, it added.
On a half-yearly basis, the statement said the real GDP, or GDP at constant prices, in April-September of 2024-25 (H1 FY25) is estimated at Rs 87.74 lakh crore, against Rs 82.77 lakh crore in the first half of 2023-24, showing a growth rate of 6 percent.
Nominal GDP, or GDP at current prices, in H1, 2024-25 is estimated at Rs 153.91 lakh crore, against Rs 141.40 lakh crore in H1 of 2023-24, showing a growth rate of 8.9 percent, it stated.
Meanwhile, the government data showed that the Centre’s fiscal deficit at the end of the first seven months of the current financial year touched 46.5 percent of the full-year target.
In absolute terms, the fiscal deficit—the gap between the government’s expenditure and revenue—was at Rs 7,50,824 crore during the April-October period, according to data released by the Controller General of Accounts (CGA).
The deficit stood at 45 percent of the Budget Estimates (BE) in the corresponding period of 2023-24.
As regards the output of eight key infrastructure sectors, it expanded by 3.1 percent in October 2024, sharply down from a 12.7 percent growth registered in the same month last year.
On a monthly basis, the production growth of these sectors was higher than the 2.4 percent expansion recorded in September 2024.
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