Hits And Misses: From Agriculture To Manufacturing, Who Contributed Most To Lifting GDP In Q2FY24?

The Indian economy has continued to show resilient growth in Q2 of FY24, surpassing estimates including that of RBI. A host of sectors contributed massively to driving the GDP growth rate in Q2, among which mining, manufacturing, construction and utility services were the biggest contributors. However, the agriculture sector declined due to sub-par monsoon. It would be the second time in a row that GDP has been higher than RBI's consensus. Not just that even the country's GVA posted healthy growth.

In the second quarter of FY24, the country's real GDP in current prices showed a growth of 7.6% to Rs 41.74 lakh crore, compared to Rs 38.78 lakh crore with a growth rate of 6.2% in Q2FY23.

Meanwhile, gross value added (GVA) growth was at 7.4% in Q2FY24 to over Rs 38.28 lakh crore, as against the growth of 5.4% to Rs 35.64 lakh crore in Q2FY23.

In Q1FY24, GDP and GVA growth were at 7.8% each.

From April to September 2023, real GDP is estimated at Rs 82.11 lakh crore as against Rs 76.22 lakh crore during the corresponding period of the previous year, showing a growth of 7.7% in H1 2023-24 as against 9.5% in H1 2022-23.

Here are the hits and miss of Q2 GDP data in terms of sector-wise:

Hits!

Mining & Quarrying: This sector posted a growth of 10% in Q2FY24 versus 5.8% in Q1FY24. Also, notably, this sector showed robust growth against the Q2FY23 point where it was in negative 0.1%.

Manufacturing: This segment was the star performance of Q2 GDP growth. Manufacturing growth shot up to 13.9% in Q2FY24 versus 4.7% in Q1FY24, and -3.8% in Q2FY23.

Electricity, Gas, Water Supply & Other Utility Services: These services together posted a growth of 10.1%, a strong upside from a meagre 2.9% growth in Q1FY24. In Q2 of FY23, the growth was at 6%.

Constructions: Growth here was ar 13.3% in Q2FY24, as against the rate of 7.9% in Q1FY24. In the Q2 of the previous fiscal, the growth was at 5.7%.

Missed!

Agriculture: On an expected line, growth here stood at 1.2% due to monsoon 2023 which touched a five-year low on the backdrop of El Nino. Agriculture growth stood at 3.5% in Q1FY24. GVA in agriculture stood at Rs 4.35 lakh crore versus Rs 5.13 lakh crore in Q1FY23. Even compared to Q2FY23 print of 2.5%, agriculture growth slows down in Q2FY24.

Trade, hotels, transport, communications, & services related to broadcasting: The growth here slowed to 4.3% in Q2FY24 compared to 9.2% in Q1FY24. The growth stood at 15.6% in Q2FY23.

Financial, real estate & professional services: Growth here also halved to 6% in Q2FY24 sequentially, compared to 12.2% growth in Q1FY24. In the same quarter a year ago, the growth was 7.1%.

Public administrations, defence & other services: Here, growth mildly dipped to 7.6% in Q2FY24 versus 7.9% in Q1FY24, however, was better compared to the growth rate of 5.6% in Q2FY23.

Nevertheless, India's economy takes the lead in the world and beats all estimates. RBI had expected the country's GDP growth at 6.5% for the second quarter of FY24, which was the same as the estimates of Q1FY24. However, RBI expects GDP growth to slow after Q2! In the third and fourth quarters, the central bank expects GDP to come to 6% and 5.7% respectively. For overall FY24, RBI expects GDP growth to be at broadly 6.5%.