India’s GDP grows by 6.7 percent in Q1: Govt report

India’s gross domestic product slowed to a five-quarter low of 6.7 per cent in April-June this fiscal against 8.2 per cent in the year-ago period, mainly due to poor showing by the farm sector, according to government data.
India remains the fastest-growing major economy, as China’s GDP growth in the April-June quarter was 4.7 per cent.
The agriculture sector recorded a 2 per cent growth, down from 3.7 per cent in the April-June quarter of 2023-24, as per the National Statistical Office (NSO) data released on Friday.
However, the growth in the manufacturing sector accelerated to 7 per cent in the first quarter of the current fiscal compared to 5 per cent in the year-ago period.
The previous GDP low was 6.2 per cent in January-March 2023.
The new numbers may put pressure on the Reserve Bank of India to cut interest rates after holding them steady at 6.50 percent for more than 18 months. Year-on-year gross domestic product grew at its slowest pace in five quarters and came in below the Indian central bank’s estimate of 7.1 percent.
Meanwhile, the Indian economy had expanded to 7.8 percent on-year in the previous March quarter.
Experts say the pace of growth slowed in part due to sluggish government capital expenditure, reported AFP. Businesses have also blamed protracted summer heatwaves in parts of the country for hampering store footfalls and urban consumption.
India’s fiscal deficit for April-July was 2.77 trillion rupees ($33.05 billion), or 17.2% of the estimate for the financial year. Net tax receipts for the period were 7.15 trillion rupees, or 27.7% of the annual target, compared with 5.83 trillion rupees for the same period last year, according to the data.
For the first four months, the government’s capital expenditure or spending on building physical infrastructure was 2.61 trillion rupees, or 23.5% of the annual target, against 3.2 trillion rupees for the same period a year earlier.