India’s GDP grows by 7.8% in the first quarter of FY26, driven by services and agriculture, surpassing expectations set by the RBI and the market, despite global uncertainties.
Sector-wise Growth Drivers
Agriculture Recovery Leads the Upswing
- Agriculture Sector: Rebounded sharply, growing by 3.7% compared to 1.5% in the same period last year.
Manufacturing and Construction Rebound
- Manufacturing: Expanded by 7.7%.
- Construction: Grew by 7.6%.
Services Sector: The Growth Leader
- Services Sector: Grew by a strong 9.3%.
Investment and Consumption Trends
Capital Formation and Government Spending
- Gross Fixed Capital Formation (GFCF): Rose by 7.8%.
- Government Final Consumption Expenditure: Surged by 9.7% in nominal terms.
Private Consumption Slows
- Private Final Consumption: Showed slower growth.
Exceeding Forecasts: RBI and IMF Perspectives
The 7.8% GDP growth surpassed the RBI’s projection of 6.5% for Q1 FY26. The IMF reaffirmed India’s position as the only major economy expected to grow above 6% in FY26.
Key Takeaways for Competitive Exams:
- India’s GDP grew by 7.8% in Q1 FY26, exceeding market expectations.
- The agriculture sector rebounded sharply by 3.7%.
- Services sector led growth with a 9.3% increase.
- Government spending surged by 9.7% in nominal terms.
