Several redeeming features help India’s GDP expand by 13.5 per cent in first quarter
Sandeep Dikshit
New Delhi, August 31
The Indian economy grew by 13.5 per cent in the first quarter of the current fiscal, mainly due to the base effect.
In comparison, the Chinese economy grew by just 0.4 per cent in April-June 2022.
The latest Q1 GDP growth figures come with several redeeming features crucial to fuelling further growth. Gross Fixed Capital Formation, an important process that accelerates economic growth, rose to 34.7 per cent from 32.8 per cent, the highest in 10 years.
On the other hand, private final consumption expenditure, another major driver of economic growth and accounting for 60 per cent of India’s GDP also rose to 59.9 per cent from 54 per cent in Q1 of 2021-2. Gross Value Added (GVA) grew by 12.7 per cent to Rs 34.41 lakh crore in April-June this year.
A drag in the form of Government Final Consumption Expenditure went down to 11.2 per cent as against 12.6 per cent in the Q1 of last fiscal. Fiscal deficit narrowed to 20.5 per cent of the annual target in Q1 as compared to 21.3 per cent in the same period of the last year. This will help the Government meet the fiscal deficit target of 6.4 pc of GDP, said Finance Secretary TV Somanathan.
The gross domestic product (GDP) had expanded by 20.1 per cent in the corresponding April-June period of 2021-22, according to data released by the National Statistical Office (NSO). It had contracted by 23.8 per cent in Q1 of 2020-21.
The 13.5 per cent estimate is lower than the 16.2 per cent projected by the Reserve Bank of India (RBI) but close to rating agency ICRA’s estimate of 13 per cent.
Nominal GDP or GDP at Current Prices in Q1 2022-23 is estimated at Rs 64.95 lakh crore against Rs 51.27 lakh crore in Q1 2021-22, a growth of 26.7 per cent compared to 32.4 per cent a year ago.
Real GDP in Q1 of 2022-23 is estimated at Rs 36.85 lakh crore. It was Rs 32.46 lakh crore in Q1 of 2021-22 and a mere Rs 27.03 lakh crore in Q1 of 2020-21 due to a nationwide lockdown.
GVA in the farm sector was a healthier 4.5 per cent as against 2.2 per cent a year ago. But GVA growth in manufacturing fell 4.8 per cent as against a rise of 49 per cent during the year-ago period. GVA growth in mining was 6.5 per cent compared to 18 per cent.
The GVA in the construction sector also fell to 16.8 per cent from 71.3 per cent. The electricity, gas, water supply and other utility services segment grew by 14.7 per cent in the quarter compared to 13.8 per cent a year ago.
GVA growth in the services sector was 25.7 per cent during the first quarter against 34.3 per cent. Financial, real estate and professional services grew by 9.2 per cent in the first quarter over 2.3 per cent earlier. Public administration, defence and other services posted 26.3 per cent growth against 6.2 per cent in the first quarter of last fiscal.
