New Delhi, Aug 31 (PTI) India Inc on Thursday said the first quarter GDP growth of 7.8 per cent augurs well and will have a multiplier effect on economy by stimulating demand in various sectors in the coming months.

India recorded GDP growth of 7.8 per cent during the April-June period of 2023-24, the highest in the past four quarters, on the back of double-digit expansion in the services sector, retaining its position as the world's fastest-growing major economy.

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The Gross Domestic Product (GDP) had recorded a growth of 13.1 per cent in the first quarter (Q1) of 2022-23, 6.2 per cent in Q2, 4.5 per cent in Q3 and 6.1 per cent in Q4.

India's 7.8 per cent GDP growth in the April-June quarter is higher than 6.3 per cent recorded by China during the same period.

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Commenting on the data, CII director general Chandrajit Banerjee said the impressive GDP growth in the first quarter was buttressed by robust domestic demand and resilient service sector growth even as net exports remained a drag on growth.

"The continuing robust performance by investment demand is particularly note-worthy as it augurs well for stimulating demand in other sectors too through its multiplier impact on growth..

"Going forward, we believe India is firmly on track to remain the fastest-growing major economy for the third year in a row this fiscal," he said.

Assocham Secretary General Deepak Sood said the real GDP growth of 7.8 per cent in the first quarter of 2023-24 would certainly make major economies of the world envy of India which has become a major force in driving the global economy.

"At a time when major economies are grappling with high inflation, tight monetary conditions, supply disruptions amidst geo-political issues, India has navigated the global headwinds with courage, tenacity and a strong-willed political leadership," he said.

Real GDP or GDP at constant (2011-12) prices in Q1 2023-24 is estimated to attain a level of Rs 40.37 lakh crore, as against Rs 37.44 lakh crore in Q1 2022-23, showing a growth of 7.8 per cent as compared to 13.1 per cent in Q1 2022-23, National Statistical Office (NSO) said in a statement.

It further said the nominal GDP or GDP at current prices in the first quarter of 2023-24 has been estimated at Rs 70.67 lakh crore, as against Rs 65.42 lakh crore in the year-ago period, showing a growth of 8 per cent as compared to 27.7 per cent in Q1 2022-23.

Aditi Nayar, Chief Economist, ICRA Ltd said 'private final consumption expenditure (PFCE)' growth witnessed an uptick to 6 per cent in Q1 FY2023 after a subdued performance in H2 FY2023.

Moreover, gross fixed capital formation (GFCF) grew at a robust pace of 8 per cent, notwithstanding the deceleration vis-à-vis Q4 FY2023, with the GFCF to GDP ratio (in nominal terms) rising to 29.3 per cent in Q1 FY2024 from 29.1 per cent in the year-ago period.

Rumki Majumdar, Economist, Deloitte India said the growth was supported by a strong uptick in private consumer and investment spending, which grew by 6 per cent and 7.8 per cent, respectively.

"That bodes well as India needs to see a sustained rebound in these pillars to achieve the target growth rates. However, government spending and exports weighed on growth. This was expected. The government's decision to contain its revenue expenses and the global slowdown are the reasons for their negative growth," Majumdar said.

Puneet Kaura, MD and CEO, of Samtel Avionics Limited, opined that the robust performance of the economy in the first quarter of the current financial year is on account of the performance of the services and agriculture sectors.

The government, he said should focus on the MSME sector to ensure sustained growth in the coming quarters and years as a vibrant MSME sector is also essential for boosting the country's exports and generating employment at a large scale.

Suvodeep Rakshit, senior economist at Kotak Institutional Equities, said investment growth continued to outpace consumption growth.

"We expect this trend to continue over next couple of quarters. GDP growth prints will be lower than the 1Q print for the rest of the year. Going forward, we need to watch for risks to the agriculture sector, sustenance of capex push from central and state governments, global demand conditions, and lagged impact of interest rate hikes," he said.

On the GDP data, Rohit Arora, CEO and Co-founder, Biz2Credit and Biz2X, said the robustness of the Indian workforce in technology, healthcare, and other key industries has not gone unnoticed by global stakeholders, further fueling growth.

Additionally, he said the country has witnessed high direct and indirect tax collections, indicative of vibrant economic activity and bolstering public finances.

As per the NSO data, the output (GVA) in the 'mining and quarrying' decelerated to 5.8 per cent in the first quarter from 9.5 per cent a year ago, 'electricity, gas, water supply and other utility services' to 2.9 per cent from 14.9 per cent, and 'construction' by 7.9 per from 16 per cent.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)