6.7 pc GDP growth inspiring despite deepening geopolitical distress: Industry

New Delhi: India has been in a glorious position post-Covid, being the fastest-growing economy in the world with over 7 per cent growth which is visible across the board and if we continue to grow at 7 per cent, the effective growth rate is expected to be 11-12 per cent because we have a very strong parallel economy which is also functioning strong, experts said on Friday.

India’s growth at 6.7 per cent in the first quarter (Q1) of FY2024-25 is inspiring despite deepening geopolitical distress and global macroeconomic headwinds. Manufacturing, construction and electricity sectors have become the major growth drivers in the recent quarters.

"The manufacturing sector has grown at 7 per cent in Q1 FY 2024-25 on the back of strategic reforms and prudent policy measures by the government and efforts of industry," said Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry.

Vivek Rathi, National Director, Research, Knight Frank India, said the momentum in the real estate and infrastructure industries has sustained and is reflected in the 10.5 per cent growth seen in the construction sector. The monsoon has spread well, improving prospects in the subsequent quarters.

"India still remains the fastest growing economy among the major economies of the world. Critical sectors, including manufacturing, continue to retain strength and should be further picking up, going forward," said Deepak Sood, Secretary General, Assocham.

The gross fixed capital formation at 34.8 per cent of GDP for Q1 FY 2024-25 is indicating steady capacity expansion for more employment opportunities in the coming times, said industry experts.

Aman Aggarwal, a renowned economist, said a robust parallel economy is also having a rebounding impact in terms of consumption.

"India is also the fourth largest foreign exchange reserve holder in the world, along with one of the largest FDI recipients in the world. The country has become the favourite destination for investment globally which is creating this rebounding effect for the country," Aggarwal told IANS.

Foreign direct inflows to India rose by 26.4 per cent, reaching $22.4 billion during April-June 2024, marking the fastest expansion in nearly five quarters, according to the Reserve Bank of India (RBI).