Owing to seven phase long Lok Sabha polls, Chief Economic Advisor V Anantha Nageswaran while commenting on GDP growth explained that growth momentum remained strong as the slowdown in the first quarter was anticipated due to elections.
"The growth momentum remains strong. The first quarter slowdown was anticipated due to the election and due to slowdown in government spending...there is healthy progress in monsoon, corporate and bank balance sheets are in good shape," said the CEA.
India's gross domestic product (GDP) slipped to a 15-month low of 6.7 per cent on an annual basis in the April-June quarter of the current financial year, the government data showed on Friday. The Reserve Bank of India (RBI) had in August, during the last Monetary Policy Committee meeting, projected India's GDP to grow at 7.1 per cent in the Q1FY25.
Meanwhile, an ET poll of 14 economists had projected the GDP to grow at 6.85 per cent.
Further commenting on growth for the quarter, the chief advisor explained that gross fixed capital formation stood at 34.8% of GDP in real terms in the June quarter indicates that private investment is playing its par.
Read More: India's GDP hits 15-month low of 6.7% in Q1FY25
CEA on rural India:
India's primary sector comprising agriculture and mining industries witnessed a dip at 2.7 per cent on an annual basis as against 4.2 per cent in the corresponding period of FY24.
In a significant low, agriculture slowed to 2.0 per cent in the first quarter of FY25 on an annual basis. The sector had grown at 3.7 per cent in FY24.
Better monsoon conditions could push the agriculture sector into a better direction, the government said.
"Monsoon progress brightens agriculture outlook," V Anantha Nageswaran, the government of India's Chief economic advisor said.
Talking about the farm sector growth, he said there are very few deficit monsoon subdivisions and most divisions have experienced normal rainfall. The sowing of kharif is higher than last year. "I think, the agriculture and allied sectors will see a rebound in their growth rates as we head further into the financial year," he said.
Rural consumption has indeed stabilised and improved, and a good monsoon will give a further boost to rural and overall consumption in the coming quarters.
The budget also provides a further boost to the continued good momentum, particularly with the focus on employment, generation, skilling, agriculture, MSME sector and energy security in the medium term, he said.
CEA on manufacturing sector:
Further, the secondary sector consisting of manufacturing and electricity industries recorded a significant growth of 8.4 per cent on an annual basis. The growth rate for India's secondary sector had stood at 5.9 per cent in the sam ..
Manufacturing witnessed an accelaration in growth at 7.0 per cent for the first quarter of the current fiscal year on an annual basis. The manufacturing industry had recorded a growth of 5.0 per cent in FY24.
The tertiary sector slipped to 7.2 per cent annually, when compared to its growth of 10.7 per cent in FY24.
"India was the fastest-growing major economy in the June quarter. Data shows better alignment between demand and supply sides of the economy in the June quarter," said Chief economic advisor V Anantha Nageswaran.
The Chief economic advisor stated that private consumption and investment have pushed the Q1 numbers. GDP and GVA are moving forward, and heading towards their trend growth rates, Nageswaran explained.
The data for April-June quarter holds significance as the evaluation comes after Prime Minister Narendra Modi secured a third term to form government at the Centre in May.
Source Name : Economic Times