India’s GDP growth accelerates to 7.8 pc in April-June quarter

India’s GDP growth accelerated to a robust 7.8 per cent in the first quarter (April-June) of the current financial year compared to the growth of 6.5 per cent during same quarter of FY 2024-25, official figures released by the Ministry of Statistics showed on Friday. 

The agriculture sector bounced back with a strong growth rate of 3.7 per cent in the first quarter of 2025-26, as compared to the growth rate of 1.5 per cent registered in the first quarter of the last financial year when farm output was hit by an erratic monsoon.

The manufacturing sector posted a growth 7.7 per cent and the construction sector grew by 7.6 per cent.

The growth rate of the tertiary sector which includes services shot up to 9.3 per cent during the first quarter of 2025-26 compared to the corresponding figure of 6.8 per cent in Q1 of FY 2024-25.

Gross Fixed Capital Formation, which reflects the amount of investment being made in the economy, went up to 7.8 per cent during the quarter from the corresponding figure of 6.7 per cent in the same quarter of the previous financial year..

The government’s final consumption expenditure (GFCE) registered an increase of 9.7 per cent growth rate in nominal terms during Q1 of FY 2025-26, compared to the growth rate of 4 in Q1 of FY 2024-25

Real private final consumption expenditure clocked a per cent growth rate during Q1 of FY 2025-26 as compared to the 8.3 per cent in the same period of the previous financial year.

Apart from the strong performance of the agriculture sector, the massive investments by the government in big ticket infrastructure projects such the highways, railways, ports and airports have helped to drive up the growth rate as India continues to be the fastest growing economy amid the global slowdown.

The growth rate in the April-June quarter has turned out be higher than 6.5 per cent projected by the RBI for the quarter.

The RBI has retained its forecast for India’s GDP growth at 6.5 per cent for 2025-26, despite global uncertainties, as it expects strong rural demand on the back of a good monsoon and robust government expenditure on big ticket infrastructure projects to propel growth.

RBI Governor Sanjay Malhotra said, “The above normal southwest monsoon, lower inflation, rising capacity utilization and congenial financial conditions continue to support domestic economic activity. The supportive monetary, regulatory and fiscal policies including robust government capital expenditure should also boost demand. The services sector is expected to remain buoyant, with sustained growth in construction and trade in the coming months.”

The IMF has forecast India to be the only economy that is expected to clock an over 6 per cent growth rate in 2025-26 as the US tariff turmoil is expected to disrupt world trade and slow down the growth of the global economy.

Picture Courtesy: IANS