India’s Economy Accelerates: Q1 FY 2025-26 GDP Growth at 7.8%, Surpassing Expectations

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thenews21bureau
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13
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New Delhi: India’s economy has kicked off the financial year 2025-26 on a strong note, posting a 7.8 percent growth rate in the first quarter (April–June), according to data released by the Ministry of Statistics & Programme Implementation (MoSPI). This marks a significant improvement over the 6.5 percent growth recorded in Q1 of FY 2024-25.

The real GDP at constant prices is estimated at ₹47.89 lakh crore, up from ₹44.42 lakh crore last year, while nominal GDP at current prices stands at ₹86.05 lakh crore, reflecting an 8.8 percent increase. Real Gross Value Added (GVA) has grown 7.6 percent to ₹44.64 lakh crore, and nominal GVA rose to ₹78.25 lakh crore, a growth of 8.8 percent.

These numbers have exceeded earlier forecasts. SBI Research had projected Q1 GDP at 6.8–7 percent, while the Economic Survey had estimated overall growth for FY 2025-26 at 6.3–6.8 percent, citing strong macroeconomic fundamentals tempered by global uncertainties.

Sectoral Highlights

Agriculture & Allied Sector: Real GVA growth surged to 3.7 percent, up from 1.5 percent last year.

Secondary Sector: Manufacturing (7.7 percent) and Construction (7.6 percent) maintained robust growth, while Mining & Quarrying (-3.1%) and Utilities (0.5%) moderated.

Tertiary Sector: Services recorded a 9.3 percent growth, up from 6.8 percent in Q1 last year.

Government Expenditure: Government Final Consumption Expenditure (GFCE) jumped 9.7 percent in nominal terms, compared to 4.0 percent last year.

Private Consumption: Real Private Final Consumption Expenditure (PFCE) rose 7.0 percent, slightly lower than last year’s 8.3 percent.

Investment Activity: Gross Fixed Capital Formation (GFCF) expanded 7.8 percent, compared to 6.7 percent in Q1 FY 2024-25.

The Reserve Bank of India (RBI) had earlier projected a real GDP growth of 6.5 percent for FY 2025-26, with quarterly growth expectations ranging from 6.3 to 6.7 percent. The current numbers indicate a strong start to the fiscal year, reflecting resilient domestic demand, a robust services sector, and steady performance in manufacturing and construction.

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