The Indian economy clocked a GDP growth of 6.7 per cent in the first quarter (April-June) of the financial year 2024-25 over the growth rate of 8.2 per cent in Q1 of FY 2023-24, figures released by the Ministry of Statistics on August 31 showed. The crucial manufacturing sector that provides quality jobs to the young workforce posted a 7 per cent growth. The overall growth has been driven by significant growth in the Secondary Sector (8.4 per cent), comprising Construction (10.5 per cent), Electricity, Gas, Water Supply & Other Utility Services (10.4 per cent) and Manufacturing (7.0 per cent) sectors. Private Final Consumption Expenditure and Gross Fixed Capital Formation have witnessed growth rates of 7.4 per cent and 7.5 per cent, respectively, during the first quarter.
India has been in a glorious position post-Covid, being the fastest-growing economy in the world with over 7 per cent growth which is visible across the board and if we continue to grow at 7 per cent, the effective growth rate is expected to be 11-12 per cent because we have a very strong parallel economy which is also functioning strong. Manufacturing, construction and electricity sectors have become the major growth drivers in the recent quarters. The manufacturing sector has grown at 7 per cent on the back of strategic reforms and prudent policy measures by the government and efforts of industry. India’s growth at 6.7 per cent in the first quarter (Q1) of FY2024-25 is inspiring despite deepening geopolitical distress and global macroeconomic headwinds.
The momentum in the real estate and infrastructure industries has sustained and is reflected in the 10.5 per cent growth seen in the construction sector. Critical sectors, including manufacturing, continue to retain strength and should be further picking up, going forward. The gross fixed capital formation at 34.8 per cent of GDP for Q1 FY 2024-25 is indicating steady capacity expansion for more employment opportunities in the coming times. With robust revenue growth and further fiscal consolidation, the debt-to-GDP ratio is projected to decline from 83.9 per cent in FY23/24 to 82 per cent by FY26/27. A robust parallel economy is also having a rebounding impact in terms of consumption.
With the World Bank revising India’s growth outlook from previous forecast of 6.6 per cent to 7 per cent in the current fiscal, the country is continuously increasing its resilience despite many uncertainties at the global front. According to the World Bank, the Indian economy continues to grow at a healthy pace and the country’s medium-term outlook remains positive. The macroeconomic fundamentals such as inflation, current account deficit, fiscal deficit, debt to GDP ratio have turned benign in the recent quarters and indicate India’s strong growth to continue and remain fastest among the major economies and would be crucial to strengthen India’s strong presence in the global ecosystem.
