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 India’s gross domestic product (GDP) grew at 6.3% in July-September quarter (Q2) of current financial year, showed the official data released by National Statistical Office (NSO) on Wednesday the 30th of November 2022.

The Indian economy had expanded 8.4% in the same quarter of the previous financial year.

“Real GDP or GDP at Constant (2011-12) Prices in Q2 2022-23 is estimated at Rs 38.17 lakh crore, as against Rs 35.89 lakh crore in Q2 2021-22, showing a growth of 6.3 percent as compared to 8.4 percent in Q2 2021-22,” said the official release on GDP data.

Nominal GDP or GDP at current prices in July-September quarter of current fiscal is estimated at Rs 65.31 lakh crore as against Rs 56.20 lakh crore in Q2 of previous fiscal showing a growth of 16.2% as compared to 19% growth in Q2 of last financial year.

“While a normalising base expectedly flattened the YoY GDP growth in Q2 FY2023 relative to the previous quarter, growth relative to the pre-covid period improved appreciably, which we believe is a better gauge of the underlying growth momentum in this period,” said ICRA Chief Economist Aditi Nayar while commenting on the GDP data.

“GDP growth was boosted by the performance of private consumption expenditure and gross fixed capital formation, whereas government expenditure displayed a discouraging contraction in Q2 FY2023, on account of the modest de-growth in the Centre’s non-interest revenue expenditure. Additionally, net imports nearly doubled relative to the year-ago period, exerting a drag on the GDP growth,” she further said.

The NSO data showed the agriculture sector continued to be the shining star with the sector output growing by 4.6% during the July-September quarter of current financial year. Manufacturing sector performance was disappointing as it declined by 4.3% during the period under review. Construction sector output increased by 6.6% in this period.

Among other key sectors, mining output contracted by 2.8% in the second quarter. The highest growth was seen in trade, hotels, transport, communication & services related to the broadcasting segment which grew at 14.7%. The financial, real estate and professional services segment grew 7.2% during this period.

“Q2 GDP growth expectedly slowed to 6.3% and GVA at 5.6%, led by growth in the services sector while manufacturing was a big drag. Going ahead, even as recovery in domestic economic activity is yet to become broad-based, protracted global drags, shrinking corporate profitability, demand-curbing monetary policies and diminishing global growth prospects weigh on output,” said Madhavi Arora, Lead Economist, Emkay Global Financial Services.

“This will put pressure on domestic growth, which is yet to be broad-based and still lacks the next lever of secular growth. We see downside risks increasing for our 7% growth forecast for FY23,”she added.

GDP at constant (2011-12) prices in April-September period of 2022-23 (H1 2022-23) is estimated at Rs 75.02 lakh crore as against Rs 68.36 lakh crores during the corresponding period of previous year, showing a growth of 9.7%.