Q1 GDP Numbers Reflect India's Resilience, Confident India Will Stick To Fiscal Deficit Target: Economic Affairs Secretary

Robust Q1 GDP growth underlines the basic resilience and strengthening momentum of the economy, anchored in strong macroeconomic fundamentals, Department of Economic Affairs Secretary Anuradha Thakur said.

In an interview with ANI, Thakur said, "In our view, the Q1 numbers reflect the resilience of our economy. They show a strengthening of economic momentum, anchored in strong macroeconomic fundamentals. On the supply side, we have seen all-round growth in manufacturing, construction, and service activities, as well as robust growth in agriculture."

"The rabi harvest and kharif sowing have significantly exceeded last quarter's figures. We have a good buffer stock and have had favorable rainfall. On the demand side, the primary drivers have been domestic, as net exports contribute less to demand in our economy," she added.

Asked about the likely impact of the 50% tariffs imposed by the US administration, she noted that the Indian economy's dependence on exports is relatively low.

"As an economy, our dependence on exports is not that high. There could be some near-term disturbances, but in the overall annual scenario, we are not revising our growth figures yet. We believe the outlook remains positive, and the momentum demonstrated in Q1 will hold. Agriculture is a strong reason for this optimism," she said.

"The high-frequency indicators also give us confidence that consumption will remain robust. This is underpinned by the strong capital expenditure push the government has been making for the last several years, particularly in Q1, which is about 30% higher than the three-year average," she added.

India's real GDP is estimated to have grown by 7.8% in the April-June quarter of the financial year 2025-26, surpassing the 6.5% growth rate in the same quarter of the previous fiscal year, according to official data released on Friday. India's nominal GDP grew at an 8.8% rate during the April-June quarter.

India's fiscal deficit for April-July widened to 29.9% of the 2025-26 target, compared to 17.2% in the same period last year.

Asked how concerned one should be about this slippage, Thakur responded that monthly or quarterly fiscal deficit numbers are not necessarily indicative of the full year.

"On a monthly or quarterly basis, there could be temporary mismatches between the flow of non-debt receipts and expenditure. For the full year, we remain confident that we will meet the fiscal deficit target we set and maintain it," the Secretary stated.

India's fiscal deficit for April-July stood at Rs 4.68 lakh crore, or 29.9% of the 2025-26 target, compared to 17.2% during the same period last year.

Thakur dismissed concerns about quarterly performance impacting annual projections.

"The fiscal deficit number for Q1 is not an indicator for the full year. On a monthly or quarterly basis, there could be temporary mismatches between non-debt receipts and expenditures," she told ANI.

In her Budget speech, Finance Minister Nirmala Sitharaman set the Revised Estimate for the fiscal deficit in 2024-25 at 4.8% of GDP, with the Budget Estimate for 2025-26 projected at 4.4% of GDP.

(With inputs from ANI)

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