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India's 7.8% real GDP growth in the first quarter of FY27 was supported by buoyant high-frequency economic indicators, including strong industrial activity and electricity consumption, according to Rumki Majumdar, Director and Chief Economist, Deloitte India.
Speaking exclusively to ANI, Majumdar said the stronger-than-expected GDP growth suggests that the economy has remained resilient despite the uncertainties during the April-June period. "The numbers that have come up are extremely positive. I don't think the market had bet on a 7.8 per cent growth," Majumdar said, adding that Deloitte is likely to significantly revise its growth projection for the full financial year. Majumdar said the significance of the 7.8 per cent growth was greater because the April-June quarter was expected to be one of the more uncertain periods of the year, amid the impact of the war, higher petrol prices, rising fertiliser prices and the building impact of El Nino. She also said several high-frequency indicators were already pointing towards underlying buoyancy in the economy. "If you look at some of the high frequency indicators also it had been pointing out. Say CAPEX or IIP has been one of the highest gains, and then electricity consumption has been pretty good. That kind of tells you that industrial production has been quite strong," she said. Majumdar also pointed to strong urban demand, saying indicators from sectors such as travel and hospitality reflected continued spending by consumers. "You see the flights all being booked out all the time. So really there is a big segment of the population which is moving the economy, especially urban demand," she said. At the same time, she said rural demand appears to be moderating. Indicators related to non-durables have shown some tempering, suggesting that rural demand could face some challenges even as urban consumption remains strong. "So it's not that the GDP number is completely out of line, many of the higher-frequency indicators were also pointing to the same thing: that there is a buoyant economy," Majumdar said. According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India's real GDP grew 7.8 per cent in Q1 FY27, with real GDP estimated at Rs 81.36 lakh crore, compared with Rs 75.46 lakh crore in the same quarter of FY26. Majumdar also highlighted 11.9 per cent capital formation, calling it one of the highest levels India has seen. According to her, this indicates that investment activity is building up even as consumption remains supportive. Given strong corporate revenues and sales during April-June, Majumdar expects private capital expenditure to strengthen further and support economic growth. "Clearly private capex is likely to pull up the rest of the economy much stronger than what it has done so far," she said. Majumdar expects the October-December quarter to be particularly strong, with the festive season potentially releasing demand that was deferred earlier because of uncertainty. "Whatever spending didn't happen in the early part of the year will probably happen in the second part of the year," she said. (ANI)
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