NB In List | India's Q1 GDP grows by 7.8%, highest in four quarters; 8 key points-

New Delhi, Sept 1: India's gross domestic product (GDP) grew by 7.8% in the April-June quarter of current fiscal (2023-2024), the highest in the past four quarters, according to official data shared by the National Statistical Office.

 

 

1. This Q1 GDP rate is the highest compared to a growth of 6.1% in the previous January-March quarter of fiscal 2022-23

 

2. Thursday’s GDP readings showed India remains one of the fastest-growing economies, especially with China’s recovery stumbling. (China's GDP growth in the April-June quarter was 6.3%.

 

 

3. The GDP growth of 7.8% was mainly due to a pickup in the agriculture and service sector especially financial, real estate, and professional services and contact-intensive services of trade, hotel, and transportation

 

4. All economic activities of the services sector performed well during the first quarter of 2023-24. Trade, hotel, transport, and communication saw a growth of 9.2%.

 

5. The agriculture sector recorded a 3.5% growth, up from 2.4% in the April-June quarter of 2022-23.

 

6. The nominal GDP or GDP at current prices in Q1 2023-24 is estimated at Rs 70.67 lakh crore, as against Rs 65.42 lakh crore in Q1 2022-23, showing a growth of 8 percent as compared to 27.7 percent in Q1 2022-23, data showed.

 

 

7. However, this Q1 is much lower than compared to 13.1% growth rate witnessed in Q1 of FY 2022-23.

 

8. And, the manufacturing sector seems to have witnessed a slowdown. The GVA decelerated to 4.7% in the first quarter of the current fiscal compared to 6.1% in the year-ago period. Also, India's unemployment rate remained high at 7.95% in July.

  

 

Addressing media after the release of the GDP numbers, CEA V Anantha Nageswaran said that the figures are in line with expectations. On rising inflation due to recent spike in vegetable prices, the CEA that it is no cause of concern as the government as well as RBI are taking measures to maintain adequate supply.

 

"Food inflation is likely to subside with arrival of fresh stock and govt measures ... impact of deficient rains in August will be watched," he said.

 

"There is momentum in economic activity in general and it is not driven by price-related distortions. Therefore our projections still are very comfortably placed at 6.5 per cent for the current financial year," he said.

 

Risk is evenly distributed to around 6.5 per cent growth projection for FY2023-24, he said.

 

Rising crude prices may warrant attention and prolonged geopolitical uncertainty and likely tighter financial conditions can pose risk to growth, he added.

 

The CEA also said that at the moment, there is no threat to the 5.9% fiscal deficit target announced in Union Budget 2023-24.

 

It should be noted that GDP is the broadest measure of economic growth and denotes the value of all goods and services produced in an economy.