Providing information, SBI Research said that India’s economy is likely to grow at a rate of 7.8% in the July-September quarter. This is on par with the growth rate of the last three months and higher than the Reserve Bank of India’s (RBI) estimate of 7.2%. The estimate is based on 54 ‘high-frequency indicators’ (fast-changing indicators) related to agriculture, industry and service sectors. On this account, cement production, commercial vehicle sales, non-oil exports and port cargo increased at the end of the quarter.
At the same time, mining production, tractor sales and passenger numbers at airports have declined. Tractor sales, which rose 11.9% in June, fell 18.1% in September. During the same period, mining output, which had previously been growing at a rate of 1%, has now contracted by 6.2%. SBI Research estimates ‘Real Gross Value Added’ (GVA) to grow at 8-8.2% in the second quarter, up from 8.2% in the April-June quarter.
Marginal growth is expected to accelerate
Nominal GDP (which measures output at current prices) is projected to grow at a rate of 11-11.5%, up from 10.3% in the June quarter. According to SBI Research, prices of agricultural products rose by an average of 7.8% in July-September, compared to 4.95% in April-June. Meanwhile, ‘real growth’ in agriculture and allied activities may decline to 2.8% from 3.6%.
Manufacturing and service sector
SBI Research has pegged the manufacturing deflator at -1.1%, giving ‘real manufacturing growth’ at 8.7% and ‘nominal growth’ at 7.6%. According to the report, input prices have been higher than output prices in many manufacturing sectors. This indicates that producers have passed on only part of the cost pressure to consumers. Services sector growth is expected to slow to 9.7% from 10% in the previous quarter. According to SBI Research’s model, overall ‘real GDP growth’ may slow to around 6.9% in the last two quarters of FY27.
