Economy grew 7.8% in Q1 despite Iran crisis and El Nino conditions

The Indian economy expanded by 7.8% in the first quarter of the current fiscal year, in spite of the tensions in the Middle East and the effects of El Nino weather pattern, according to official government data. This growth figure, revealed by the National Statistical Office (NSO), surpassed the 6.9% expansion seen in the previous quarter and the 8.6% growth recorded in the earlier quarter of this year.

The progress is attributed to the hard work of the Indian people and strong performances in manufacturing and services sectors, along with robust domestic demand, which overrode the expected negative effects of the geopolitical issues and climatic conditions. Exports and investment also showed a positive trend during the period. Finance Minister Nirmala Sitharaman, in a post on social media, recognized the NDA government's commitment to expanding economic opportunities for all citizens.

According to Chief Economic Adviser V Anantha Nageswaran, the Indian economy has demonstrated continued resilience in growth and managed to withstand global uncertainties well. He mentioned that improvements in the monsoon outlook would further aid agricultural growth in upcoming quarters. Data also revealed that Gross Value Added (GVA), which eliminates volatile components like indirect taxes and government subsidies, expanded by 8.2% in the June quarter compared to 7% in the same period last year.

Investment activities also showed robust growth, with gross fixed capital formation rising by 11.9% in the first quarter of the current fiscal year compared to 5.8% in the same period of the previous year. Private final consumption expenditure also increased by 7.1% from 6.8% in the first quarter of the previous year. CareEdge Ratings chief economist Rajani Sinha noted that the government's continued emphasis on capital expenditure-led growth has led to sustained double-digit investment growth for two consecutive quarters.