The Business Bytes
New Delhi, November 29 (TBB Bureau): India’s economy recorded a robust Gross Domestic Product (GDP) growth rate of 5.4% in the second quarter (July-September) of the current financial year, according to data released by the Ministry of Statistics on Friday. Despite a marginal slowdown from the 6.7% growth seen in Q1 (April-June), India continues to outpace its global peers, maintaining its position as the fastest-growing major economy. For comparison, China, the world’s second-largest economy, registered a 4.6% GDP growth during the same period.
The manufacturing sector saw a subdued growth of 2.2%, while the mining and quarrying sector experienced a marginal contraction of -0.1% in Q2 FY 2024-25, reflecting challenges in these areas.
The agriculture and allied sectors showed a significant recovery, registering a growth of 3.5% in Q2 after lackluster performances over the last four quarters, where growth ranged between 0.4% and 2%.
Sustained domestic consumption of finished steel drove the construction sector’s growth, which expanded by 7.7% in Q2 and 9.1% in H1 (April-September) FY 2024-25.
Tertiary Sector on the Rise: Services continued to lead India’s economic resurgence, with the tertiary sector clocking a growth rate of 7.1% in Q2, an improvement from 6% in the same quarter last year. Notably, the trade, hotels, transport, and communication subsector recorded a strong 6% growth, compared to 4.5% in Q2 FY 2023-24.
Private Final Consumption Expenditure (PFCE), which accounts for 60% of India’s GDP, recorded a significant growth rate of 6% in Q2 and 6.7% in H1 of FY 2024-25, a marked improvement from the 2.6% and 4% growth seen in the same periods last year. Analysts highlight that the acceleration in consumer spending bodes well for sustained economic momentum.
Government Final Consumption Expenditure (GFCE) also rebounded to 4.4% growth in Q2, recovering from a slowdown in Q1 caused by reduced spending during the Lok Sabha elections.
Despite the marginal slowdown in Q2, India’s economic fundamentals remain strong. Economists expect growth to rebound in the coming months, driven by easing inflation, a rise in government expenditure, and stronger domestic demand.
The Reserve Bank of India (RBI) has maintained its GDP growth forecast for the current fiscal year at 7.2%, signaling confidence in the economy’s resilience. Gross Value Added (GVA), considered a more stable metric by experts, increased by 6.8% in Q1 and 6.2% in H1 FY 2024-25.
India’s growth trajectory contrasts with other major economies, particularly China, which reported slower growth in the same periods. While challenges persist in select sectors, India’s overall economic performance and strong consumer-driven momentum underscore its leading position in the global economic landscape.
With sustained policy support, rising private investments, and robust consumer demand, India remains on course to consolidate its economic leadership in the years ahead.
