Strong public spending, rural demand, services push India’s GDP growth to 7.8 pc: Industry leaders

New Delhi, Aug 31 (IANS) India’s latest GDP performance is a clear reflection of strong public spending, improving rural demand, and a resilient services sector that continues to drive the economy forward despite global headwinds, entrepreneurs said on Sunday.

According to data released by the National Statistics Office (NSO), India’s GDP grew 7.8 per cent in the April-June quarter of 2025-26 (Q1 FY26), the fastest pace in the last five quarters.

This growth not only beat the Reserve Bank of India’s projection of 6.5 per cent but also marked a sharp rise from 6.7 per cent recorded in the same quarter last year, which was the weakest in 15 months.

Speaking exclusively to IANS, industry leaders from Laghu Udyog Bharati pointed out that government-led capital expenditure, which rose by 52 per cent, has played a crucial role in boosting growth.

They added that reforms such as rationalising GST, possible cuts in the RBI’s policy rates, and favourable monsoon conditions could provide further support to consumption in the coming quarters.

Laghu Udyog Bharati National President Ghanshyam Ojha said: “The NSO numbers clearly show that India’s economy is moving on a strong footing. The 7.8 per cent growth rate proves that public spending and resilient domestic demand are working in favour of the economy despite the challenges of global trade.”

State Vice President Mahavir Chopra highlighted the role of all three core sectors.

“The primary, secondary and tertiary sectors have all shown strong performance with 2.8 per cent, 7 per cent, and 9.3 per cent growth respectively. This balanced growth is a healthy sign for the economy.”

“Going ahead, rationalised GST and lower interest rates could further strengthen consumption,” Chopra told IANS.

Pankaj Bhandari, who heads the Laghu Udyog Bharati’s Jodhpur chapter, said that India’s growth momentum is being powered by three pillars — government expenditure, rural demand recovery, and the dynamism of the services sector.

“India’s growth momentum is being powered by three pillars — government expenditure, rural demand recovery, and the dynamism of the services sector,” Bhandari noted.

He also pointed out that construction and agriculture are two sectors where higher growth rates will be sustained.

“We believe construction and agriculture will continue to lead growth in the coming quarters,” he added.

The sectoral breakdown shows that the primary sector, which includes agriculture and mining, grew by 2.8 per cent compared to 2.2 per cent last year.

Agriculture in particular recorded an impressive 3.7 per cent growth, more than double the 1.5 per cent seen in the same period a year ago.

The secondary sector, led by manufacturing and electricity, expanded 7 per cent.

Manufacturing grew at 7.7 per cent, slightly higher than last year’s 7.6 per cent, while construction activity continued to remain strong.

The tertiary sector delivered the strongest performance with 9.3 per cent growth, significantly higher than 5.4 per cent last year.

Within this, trade, hotels, transport, communication and broadcasting services expanded 8.6 per cent, while financial, real estate and professional services grew by 9.5 per cent.

Public administration and defence rose 9.8 per cent, up from 9 per cent a year ago. India’s exports of goods and services also showed a 5.9 per cent increase in the quarter, supported by continued demand from markets such as the United States.

–IANS

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