India’s real Gross Domestic Product (GDP) accelerated to 7.8 percent, the fastest in the last four quarters, the Ministry of Statistics and Programme Implementation said on August 31. With this, India maintains its position as the fastest-expanding major economy.
Notably, following the Monetary Policy Committee (MPC) meeting in August, the Reserve Bank of India (RBI) forecast a growth rate of 8 percent for Q1. The major credit for this growth is attributed to the country’s agriculture and services sectors, especially financial, real estate, and professional services, as data released by the National Statistical Office on Thursday showed.
According to NSO data, the agricultural sector witnessed a growth rate of 3.5 percent, marking an improvement from the 2.4 percent recorded in the same period of the fiscal year 2022–23.
In an exclusive interaction with DD India, Dr. R. Kavita Rao, Director, National Institute of Public Finance and Policy, said, “The emphasis the government has been placing on capital expenditures (Capex) both at the centre and state level is very important to kickstart the economy and to get us back into the sustainable growth path.”
Asserting that India is the growth engine of the world, Dr. Charan Singh, an economist and CEO of EGROW said, “India achieved a growth rate of 7.8%, and if we compare it with other countries such as the USA’s growth rate of 2.1 percent, China’s 6.3 percent, and Japan’s 6.0 percent, among others, India’s is the best.”
Chief Economic Adviser (CEA) V Anantha Nageswaran said that at 7.8% year on year, India’s growth rate towers above the growth rate in several other leading economies. India’s economic growth maintained the strong momentum witnessed in the final quarter of FY23, he added.
The biggest positive for the Indian economy is that private sector capital formation is well underway. This augurs well for future employment and income growth in Indian households, the CEA said. He further highlighted that the new investment projects announced by the private sector have been the highest in Q1 of FY2023–24 in 14 years.
A robust blend of investment momentum and a thriving consumer base are expected to be the key contributors to the country’s economic growth. Talking about food inflation, CEA Nageswaran said, “Food inflation is likely to subside with the arrival of fresh stock in the market and government pre-emptive measures.”
He also added that the private sector is poised to contribute to stronger investment growth following the strengthening of corporate and bank balance sheets, supported by the government’s Capex push.