Ministry of Finance has noted in a latest monthly update that India's economic momentum was sustained in the first quarter of FY25. With a cumulative real GDP growth of around 27 per cent from FY21, the economy had not only regained the ground lost during the pandemic but also achieved transformational changes in many productive sectors by the end of FY24. Building on this base, India's GDP at constant prices grew by 6.7 per cent in Q1FY25. Growth in all major non-agricultural sectors stayed well above 5 per cent in Q1, indicating broad-based expansion. With the advancing monsoon, kharif sowing has also picked up, brightening prospects of agricultural production.
Mirroring the strong build-up in productive activity, the major components of aggregate demand, including private consumption, fixed investment and exports, have picked up pace. Owing to the general elections during April-June, the general government expenditure is gathering pace only gradually in the current financial year. Despite this, the overall investment grew by 7.5 per cent in Q1, indicating the strengthening of the private investment cycle. Most-high-frequency indicators on the supply side suggest continuing economic expansion in the current quarter. Steady growth in GST collections, expansionary trends in purchasing managers' indices and growth in air and port cargo indicate vigorous economic activity.
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