NEW DELHI: The Indian economy grew 7.8% during April-June quarter (Q1) of the current financial year as strong growth sustained in the manufacturing and services sector along with robust domestic demand, offsetting the anticipated adverse impact of the conflict in West Asia and El Nino conditions. Exports and investment also gained momentum during the quarter.Official gross domestic product (GDP) data released by NSO on Monday showed that though growth moderated from the upwardly 8.6% recorded in the March quarter (7.8% estimated earlier), it remained well above the 6.9% recorded during April-June 2025. “The credit for this strong performance goes to the people of India and their hard work. Reforms undertaken by the NDA govt, together with agile management of the economy, are bearing results. The NDA government led by PM Narendra Modi remains committed to further expanding economic opportunities for all our citizens,” finance minister Nirmala Sitharaman said in a social media post.Government also revised its growth estimates for the previous financial years. Growth in 2023-24 is now estimated to have been 7.3%, up from 7.2%, while a similar 10-basis-point (bps) upward revision has been made for 2024-25 and 2025-26 to 7.2% and 7.8%, respectively.
Estimates For Previous Years Revised Upwards
Chief economic adviser V Anantha Nageswaran told reporters that the Indian economy is witnessing “continued resilience” in growth and has weathered global uncertainties well and is reaping the benefits of structural reforms.He said the outlook for monsoon has also improved from what was anticipated at the end of June, which is expected to support agriculture growth in the coming quarters. GDP growth during the second quarter of 2024-25 has been revised to 7.3% from 5.4% estimated by the statistics ministry in Nov 2024.Data showed that gross value added, which strips out volatile components such as indirect taxes and govt subsidies, grew 8.2% during the June quarter, compared with 7% in the corresponding period last year. This sharp divergence from GDP is on account of strong growth in subsidies and contraction in indirect tax collections amid last year’s GST rationalisation and recent fuel excise cuts, after the West Asia war started on Feb 28, economists said.On the expenditure side, gross fixed capital formation, which represents the level of investment activity in the economy, grew 11.9% in the first quarter from 5.8% a year ago. Similarly, private final consumption expenditure, which represents demand in the economy, grew 7.1%, compared with 6.8% in the first quarter of last year.CareEdge Ratings chief economist Rajani Sinha said govt’s continued thrust on capex-led growth has translated into sustained double-digit investment growth for two consecutive quarters. “A noteworthy aspect is the sharp acceleration in exports growth,” she said. Exports grew 12% in Q1, as against 6% a year ago.
