India’s economy grew 8.4% in the July-September quarter from a year ago, going past the pre-pandemic level on strong consumer demand as the emergence of a new Covid-19 variant cast a shadow over the pace of recovery.
The country’s real GDP was ₹3.57 lakh crore in the second quarter, up 0.3% from ₹3.56 lakh crore in the same period FY20, indicating that the economy was shaking off the impact of the pandemic.
India’s September quarter growth is highest among major economies and well ahead of China’s 4.9%.
First-half GDP growth was 13.7%, helped by a 20.1% rise in the first quarter.
Subramanian said GDP growth is seen at 6.5-7% in FY23 and over 7-7.5% thereafter.
High government investments, a consumption recovery, and a stable farm sector contributed to growth, which also got a boost from the base effect. GDP contracted 7.4% in the year-earlier quarter.
Nominal GDP, measured at current prices without adjusting for inflation, grew 17.5% in the second quarter of FY22 against a 4.4% contraction in the year-ago period. Real GVA growth during the quarter was 8.5% compared with18.8% in the previous quarter.
Gross fixed capital formation, an indicator of investment, increased 11% in the second quarter compared with 55.2% in the trailing quarter. Private consumption, as reflected in private final consumption expenditure, rose 8.6% compared with 19.3% in the first quarter.
The agriculture sector grew 4.5% while manufacturing was up 5.5% in the September quarter, dented by a lack of parts, especially semiconductors. Construction witnessed a 7.5% increase while spending on public administration saw the highest growth of 17.4%.
Economists said that the durability of economic growth and demand is yet to be established as, after a broadly healthy festive season, many indicators have reflected flagging momentum in November and omicron has added to the uncertainty as countries shut borders.