India’s economy grew at a slower pace of 5.4% in the July-September quarter of the current fiscal year, marking its lowest growth rate in nearly two years, according to government data released on Friday. This was down from 8.1% in the same period last year, primarily due to a weaker performance in the manufacturing sector.
Despite the slowdown, India remains the fastest-growing major economy, outpacing China, which reported a 4.6% GDP growth for the same quarter.
The last time India’s growth was as low as 5.4% was in the third quarter of 2022-23, when it posted a 4.3% growth.
The National Statistical Office (NSO) also reported a 3.5% growth in agriculture for the quarter, an improvement from 1.7% a year ago. However, the manufacturing sector’s growth decelerated to 2.2%, down from 14.3% in the same quarter last year.
Overall, India’s GDP growth for the first half of the fiscal year stood at 6%, compared to 8.2% during the same period last year. Growth in the first quarter was 6.7%.
India’s Fiscal Deficit at 46.5%
India’s fiscal deficit reached 46.5% of the full-year target by the end of October, according to government data released on Friday. In absolute terms, the deficit stood at Rs 7,50,824 crore during the April-October period of the 2024-25 financial year.
For the same period last year, the fiscal deficit was 45% of the full-year target. The government aims to reduce the fiscal deficit to 4.9% of GDP in 2024-25, down from 5.6% in 2023-24.
The data also showed that net tax revenue for the seven-month period was approximately Rs 13 lakh crore, or 50.5% of the current fiscal’s budget estimate. Central government expenditure stood at Rs 24.7 lakh crore, or 51.3% of the budget estimate. The government plans to contain the fiscal deficit at Rs 16.13 lakh crore for the full year.