India's GDP grew 7.6% in July-September quarter, surpassing RBI's forecast
What's the story
India's Gross Domestic Product (GDP) grew by 7.6% in the July-September quarter, according to the government data released on Thursday. It was 5.4% in the corresponding quarter of the previous year.
It is way higher than what the Reserve Bank of India (RBI) expected, which was 6.5%.
This impressive growth can be attributed to increased government capital expenditure and strong consumer demand, particularly from urban residents.
Details
Government expenditure and consumer demand drive growth
The government's capital expenditure reached a whopping Rs. 4.91 lakh crore in the first half of the fiscal year, surpassing the previous year's Rs. 3.43 lakh crore.
Barclays's Rahul Bajoria observed that "headline growth likely remained resilient... with utilities, services, and construction showing robust growth."
Despite global challenges, India's economy has remained strong due to domestic demand and government spending, Bajoria added.
What Next?
Economic resilience amid global uncertainty
Although services growth slowed down in Q2, the positive GDP growth was likely supported by robust manufacturing and construction activities.
ICRA had predicted that India's GDP growth would moderate to 7% in Q2 due to a normalizing base and erratic monsoon.
The firm expects a slightly lower GDP growth of 6.0% for FY24, taking into account various factors affecting the economy.
Details
India's April-October fiscal deficit narrows to Rs. 8.04L crore
In the April-October period of FY2024, the Government of India recorded a fiscal deficit of Rs. 8.04 lakh crore, hitting 45.0% of the FY24 Budget estimate.
This increase occurred alongside an 11.2% growth in net tax revenues and a substantial 48.7% surge in non-tax revenues, primarily from the RBI dividend.
Additionally, there was a 6.5% increase in revenue expenditure and a notable 33.7% YoY expansion in capital expenditure.