GDP reached 7.6% in second quarter, 1.1% more than RBI estimate

India's Gross Domestic Product i.e. GDP growth has increased by 1.3% and reached at 7.60% in its second quarter of (Q2FY24 July-September). It was 6.3% in the same quarter of the last financial year. Whereas in the last quarter (Q1FY24-April-June) it was at 7.8%.

GDP growth 1.1% was more than RBI's estimate. RBI had estimated it to be 6.5% in the second quarter. The reason behind this was strong urban consumption, manufacturing, and higher government spending. Manufacturing growth stood at 13.9%, while construction growth stood at 13.3%.

Gross value added, i.e. GVA stood at 7.4% in the second quarter. It was estimated to be 6.8%. Whereas in the first quarter GVA was 7.8%. The growth rate in the same quarter a year ago was 5.4%.

On the other hand, from April to October the fiscal deficit budget increased to Rs 8.04 lakh crore. This is 45% of the budget estimate. The fiscal deficit target is Rs 17.86 lakh crore. The deficit in the same period last year was 45.6% of the budget estimate for 2022-23. The more the government spends than its income is called fiscal deficit.

Recently S&P Global Ratings released GDP estimates in which S&P has raised India's GDP growth forecast for fiscal year 2024 to 6.4%. Earlier it was 6%. Strong domestic momentum has been cited as the reason for this.

GDP is one of the most common indicators used to track the health of the economy. GDP represents the value of all goods and services produced within a country in a specific time. In this, the foreign companies which produce within the country's borders are also included.

There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at the base year's value or stable price. At present the base year for calculating GDP is 2011-12. Whereas nominal GDP is calculated at the current price.

RBI uses a formula to calculate GDP that is:

GDP=C+G+I+NX, C means private consumption, G means government spending, I means investment, and NX means net export.

GVA measures the total output and income of an economy. It tells how many rupees worth of goods and services were produced in a given period after calculating the input cost and price of raw materials. It also shows how much production has taken place in a particular area, industry or sector.

From the point of view of national accounting, the figure obtained after taking out subsidies and taxes from GDP at the macro level is GVA.