India’s gross domestic product (GDP) rose 13.5 per cent in the June 2022 quarter (Q1FY23) as compared with the 20.1 per cent growth registered in Q1 2021-22, according to the latest official data released on Wednesday. It is the fastest growth in a year, as the country’s GDP had grown at 4.1 per cent in the previous quarter (Q4FY22), 5.4 per cent in the December 2021 quarter of FY22, and 8.4 per cent in September 2021 quarter.
“Real GDP or gross domestic product (GDP) at constant (2011-12) prices in Q1 2022-23 is estimated to attain a level of Rs 36.85 lakh crore, as against Rs 32.46 lakh crore in Q1 2021-22, showing a growth of 13.5 per cent as compared to 20.1 per cent in Q1 2021-22," according to an official statement.
According to the latest data released by the National Statistical Office (NSO), during April-June 2022, the country’s gross value added (GVA), which is GDP minus net product taxes and reflects growth in supply, grew 12.7 per cent.
Agriculture, Manufacturing and Services GVA
The agriculture GVA during the April-June 2022 quarter jumped 4.5 per cent as against 2.2 per cent in the year-ago quarter. It had grown 3 per cent in the previous March 2022 quarter.
Manufacturing saw a growth of 4.8 per cent, compared with the 49 per cent recorded a year ago. It had contracted by 0.2 per cent in the January-March 2022 quarter.
During the first quarter of the current financial year, the trade, hotels, transport, communication and services related to broadcasting registered a growth of 25.7 per cent, lower as compared with the 34.3 per cent reported during Q1FY22. It is higher as compared with the 11.1 per cent rise witnessed in the previous quarter.
GDP growth in nominal terms, which factors in inflation, slowed to 26.7 per cent during Q1FY23, compared with 32.4 per cent during April-June 2021. “Nominal GDP, or GDP at current prices, in Q1 2022-23 is estimated at Rs 64.95 lakh crore, as against Rs 51.27 lakh crore in Q1 2021-22," according to the official statement.
Gross fixed capital formation, which is an indicator of investment activity in the country, rose 20 per cent during the June 2022 quarter, lower as compared with 62.5 per cent a year ago.
Private final consumption expenditure (PFCE), government final consumption expenditure (GFCE) registered a growth 9.9 per cent and 9.6 per cent respectively over 1QFY20.
Q1FY23 GDP Growth: Experts’ Comments
Aditi Nayar, chief economist at ICRA, said, “GDP growth surged to a four-quarter high of 13.5 per cent in Q1 FY2023, broadly in line with our estimate of 13 per cent, and substantially lower than the RBI MPC’s projection of 16.2 per cent. GDP growth will certainly moderate in Q2 FY2023, as the base effect normalises, as underscored by the moderation in the core sector growth in July 2022."
Nayar said an uneven monsoon is likely to weigh upon agriculture GVA growth and rural demand. “However, a robust demand for services, and some easing in the commodity price-inflicted pain for producers should support a year-on-year GDP growth of 6.5-7 per cent in the ongoing quarter, and 7.2 per cent for the year as a whole."
She said the 13.5 per cent GDP growth was boosted by private final consumption expenditure and gross fixed capital formation, whereas government final consumption expenditure displayed an anaemic year-on-year growth of 1.3 per cent.
Sunil Kumar Sinha, principal economist at India Ratings and Research, said, “Though the quarterly GDP growth numbers of 1QFY23 is influenced by the base effect, yet it indicates that the recovery is on course despite the global headwinds, high commodity prices especially oil and weakening of INR. Several high frequency indicators such as sales of commercial vehicles, passengers handled at airports, production of cement, railway freight/passenger and used in the estimation of 1QFY23 GDP were also showing reasonable yoy growth."
Analysts had predicted the Q1FY23 GDP growth in the range of 13-16.2 per cent. Rating agency Icra expected India’s GDP to grow 13 per cent in Q1FY23, State Bank of India (SBI) saw a 15.7 per cent growth, and the RBI forecast it at 16.2 per cent.
In the previous quarter (Q4FY22), the country’s GDP rose 4.1 per cent. For the full financial year 2021-22, the GDP saw a growth of 8.7 per cent.
China registered an economic growth of 0.4 per cent in April-June 2022.