India GDP Explained: What It Is, How It’s Calculated, And Why Growth Jumped To 8.2% In Q2

India’s economy recorded strong growth in the July–September quarter, with GDP rising to 8.2 percent, the highest in one and a half years. This increase comes after a 7.8 percent growth rate in the previous quarter and was driven mainly by strong performance in manufacturing, financial services, and real estate.

What exactly is India’s GDP, and how is it calculated?

GDP, or Gross Domestic Product, is the total value of all goods and services produced within the country during a specific period. It shows how fast the economy is growing and how healthy it is. A higher GDP means businesses are producing more, demand is strong, and incomes are generally rising.

India calculates GDP using Gross Value Added (GVA). GVA measures the value created in different sectors like manufacturing, agriculture, construction, and services. Once these values are added up, the government adds net indirect taxes, that is, taxes such as GST minus subsidies. The result is the final GDP number.

In the latest quarter, GVA growth stood at 8.1 percent, slightly lower than GDP growth. Manufacturing grew by 9.1 percent, the highest in six quarters. Financial and real estate services grew even faster, at 10.2 percent. Agriculture grew at a modest 3.5 percent.

The services sector, also called the tertiary sector, continued to lead India’s growth story. Public administration, defence, and other services rose by 9.7 percent.

GDP growth surprised economists, who expected it to slow to around 7.3 percent. The strong number may now influence the Reserve Bank of India’s upcoming interest-rate decision. With inflation extremely low and growth high, the Monetary Policy Committee faces a difficult choice.

Private consumption also increased, rising 7.9 percent due to low prices and new GST cuts. Investments grew by 7.3 percent, while government spending fell by 2.7 percent.

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