New Delhi: India’s gross domestic product (GDP) grew 7.6 percent in the second quarter (July to September) this financial year, significantly faster than the official estimate of 6.5 percent made in October.
The Ministry of Statistics and Programme Implementation released the GDP data for the second quarter as well as first half of the financial year Thursday. Coming on the back of a 7.8 percent growth in Q1, the second quarter’s figures propelled India’s growth in the first half (April-September 2023) to 7.7 percent.
This was, however, slower than the 9.5 percent growth in the first half of the last financial year.
The second quarter growth was driven by double-digit boosts in three key sectors — mining, manufacturing, and construction. The mining and quarrying sector grew 10 percent in Q2, up from 5.8 percent in Q1. However, this strong growth was enabled by a low base in Q2 last year, when the sector contracted 0.1 percent.
Similarly, the strong showing by the manufacturing sector (13.9 percent in Q2 vs 4.7 percent in Q1) was on the back of a 3.8 percent contraction in Q2 last year.
In this regard, the construction sector has emerged as an outlier, growing in double digits — 13.3 percent in Q2 versus 7.9 percent in Q1 — despite a relatively strong growth in Q2 last year of 5.7 percent. This is likely the lasting impact of the government’s ongoing infrastructure-building push.
Utility services such as water, electricity, and gas grew 10.1 percent in Q2 of this year, up from 2.9 percent in Q1 and 6 percent in Q2 of the previous year.
On the other hand, growth in the agriculture sector slowed to 1.2 percent in Q2 — likely due to the erratic rains in the country — from 3.5 percent in Q1 and 2.5 percent in Q2 of last year.
Similarly, the grouping of trade, hotels, transport, and communication sectors saw growth slowing to 4.3 percent in Q2, down from 9.2 percent in Q1 and 15.6 percent in Q2 of last year.
The government’s contribution to the GDP growth is further apparent as the share of gross fixed capital formation to the GDP — which measures how much asset creation contributes to it — grew to 35.3 percent in Q2 from 34.7 percent in Q1.
Notably, however, the share of private final consumption expenditure — a measure of the spending people do — fell to 56.8 percent from 57.3 percent in Q1 and significantly lower than the 59.3 percent seen in Q2 of last year.
(Edited by Tikli Basu)
Also read: Pakistan stock market growth has beaten India’s by more than a mile, with a spark from IMF