Data released by the government last week showed that the Indian economy grew 6.3 percent in the July-September quarter.
A business standard The analysis found that the country mirrored the global trend, with the growth rate slowing from the same quarter last year. Further analysis of data from before the pandemic (2019) shows a faster recovery of the Indian economy.
Only China had seen a faster growth rate, according to data from the Organization for Economic Co-operation and Development (OECD).
Analysis of the expenditure components of growth indicated that India was likely the only major economy to post a double-digit growth rate in private consumption in July-September 2022 compared to the same period in 2019.
While most of the western world saw government expansion, the Indian government’s consumer spending shrank by 20 percent over the period.
Meanwhile, investment, as measured by gross fixed capital formation, rose 20.8 percent.
A look at the output side also shows an improvement in the economy compared to the pre-pandemic period. Agriculture, forestry and fisheries expanded by 38 percent in nominal terms and by 15.6 percent at constant prices. In the UK, the agricultural sector grew 35 percent between the first quarter of 2019 and 2022, while China saw growth of 25 percent. But the UK and Europe have experienced higher rates of inflation than India. Manufacturing expanded at a much slower pace for India. The country recorded nominal growth of 25 percent and real growth of 9.6 percent.
July-September GDP data for India shows an annual contraction of 4 percent in manufacturing. For the first half of the fiscal year, the manufacturing sector shows only a 0.1 percent year-on-year increase in 2022-23 and a 6.6 percent increase compared to 2019.
Mining and quarrying also declined 3 percent in the July-September quarter.
As the world plunges into recession, India will have a difficult task keeping its growth rate high. Recently published estimates by the OECD show that India’s growth will fall below 6 percent in the coming year.
