GDP Data: India's economy shows strength, grows 8.2% in the second quarter
GDP Data: India economy, India's economy has once again demonstrated its strong hold. In the second quarter of the current financial year, FY26, the country's GDP grew at a robust pace of 8.2%, the highest in the last six quarters. This growth not only exceeded expectations but also clearly reflects the strength of domestic demand, the rural economy, and government spending.
GDP growth exceeds expectations, even better than the previous quarter
GDP growth was 7.8% in the previous quarter, but in Q2 it increased to 8.2%. Economists had anticipated growth of 7.3%, while the RBI had estimated it at 7%. The government's GST reduction, increased stockpiling ahead of festivals, and renewed demand in rural areas were the major reasons behind this growth.
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GST rates on essential goods were reduced from September 22nd. This led to a surge in sales of FMCG products such as household items and groceries. Finance Minister Nirmala Sitharaman stated that the GST relief would lead to additional savings of approximately ₹2 lakh crore, which would boost spending and revitalize the economy. Second-quarter data confirm this improvement.
Primary Sector: Agriculture Recovers, Mining Shows Slight Decline
The primary sector, comprising agriculture and mining, saw annual growth of 3.1%. The agricultural sector grew at a pace of 3.5%, slightly slower than last year. The mining sector remained relatively stable, registering a decline of only 0.04%. The improvement in the rural economy and a good monsoon boosted agricultural activities.
Strong Growth in Manufacturing and Power Sectors
Meanwhile, the secondary sector, which includes manufacturing and power generation, performed exceptionally well. The overall industry grew by 8.1%, and the manufacturing sector alone recorded a growth of 9.1%. This year's surge is a significant relief, given that manufacturing growth was only 2.2% last year.
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Real Reasons for Growth
Three key reasons emerged for India's strong GDP growth: the improvement in the rural economy, government capital expenditure, and increased exports. Although private investment and urban demand remain sluggish, domestic consumption continues to contribute nearly 60% of GDP, indicating stability.
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