Economy's momentum gains ground, affirms DEA Secretary Thakur based on Q1 growth figures
The Indian economy has shown a robust performance in the April-June quarter (Q1) of the Financial Year 2025-26 (FY26), according to Economic Affairs Secretary, Anuradha Tahkur. The country recorded a real growth rate of 7.8%, marking the highest growth rate in the past five quarters.
The growth in the first quarter was primarily driven by the strong performance of the manufacturing and services sectors. The agriculture sector also showed robust growth, with the rabi harvest and kharif sowing being much in excess of the previous quarters. This all-round growth on the supply side has been a significant factor in the economy's growth.
On the demand side, the primary drivers have been domestic, with net exports not contributing significantly. This domestic-led growth is a positive sign for the Indian economy, indicating its resilience and self-sustaining capacity.
The secretary also highlighted that India is on course to surpass Germany by 2028. By 2027, the country is projected to reach a GDP of ₹4.26 lakh crore ($ 5 trillion). By 2030, India is set to become the world's third-largest economy with a projected GDP of $7.3 trillion.
The secretary's statements come at a time when the Indian economy is creating jobs at a rapid pace. In the past decade, 17 crore jobs have been created in India. Urban areas reflect a 43 per cent growth in female employment, while rural India shows a 96 per cent rise in female employment. The female Labour Force Participation Rate (LFPR) for individuals aged 15 years and above has increased from 49.8 per cent in 2017-18 to 60.1 per cent in 2023-24.
The next-generation reforms for Goods & Services Tax (GST) will be launched in October 2025. The Indian states with the highest share of the total over 15.2 million active GST registrations are Maharashtra, Tamil Nadu, Gujarat, Karnataka, and Uttar Pradesh. Regions best represented in terms of the share of women-owned businesses include Tamil Nadu, Karnataka, and Maharashtra. 20 per cent of active GST taxpayers include at least one woman member, and 14 per cent are entirely women-owned.
The secretary also mentioned that the US tariff action is expected to have a transient impact on the Indian economy. She stated that the economy has strengthening momentum, anchored in strong macroeconomic fundamentals. The secretary's optimistic outlook for the Indian economy is a positive sign for investors and businesses alike.
In conclusion, the Indian economy is showing strong growth, with all sectors contributing positively. The government's focus on creating jobs, especially for women, and the next-generation GST reforms are steps in the right direction. With a robust agriculture sector, a thriving manufacturing and services sector, and a growing services sector, India is well on its way to becoming one of the world's leading economies.
