Strong public spending, rural demand, and services sector lift India’s GDP growth to 7.8%: Industry leaders

New Delhi- India’s economy grew by 7.8% in the April-June quarter of FY26, the fastest pace in five quarters, driven by robust public spending, a revival in rural demand, and the resilience of the services sector, according to industry leaders.

Data from the National Statistics Office (NSO) showed that growth not only surpassed the RBI’s 6.5% forecast but also marked a significant jump from 6.7% in the same period last year, the weakest quarter in 15 months.

Industry body Laghu Udyog Bharati credited government-led capital expenditure—up 52%—as a key driver. Leaders also pointed to GST rationalisation, potential rate cuts by the RBI, and a good monsoon as factors that could further support consumption.

National President Ghanshyam Ojha said: “The NSO numbers prove that India’s economy is on solid ground. Public spending and strong domestic demand are offsetting global challenges.”

Vice President Mahavir Chopra highlighted broad-based growth across sectors: the primary sector grew 2.8%, the secondary 7%, and the tertiary 9.3%. “This balanced performance is a healthy sign for the economy,” he noted.

Pankaj Bhandari from the Jodhpur chapter said growth is being driven by three pillars—government expenditure, rural demand recovery, and services dynamism. He added that construction and agriculture will continue to lead in the coming quarters.

Sector-wise, agriculture grew 3.7% (up from 1.5% last year), manufacturing rose 7.7%, and services expanded 9.3%. Trade, hotels, transport, and communication grew 8.6%, while financial and real estate services surged 9.5%. Public administration and defence also climbed 9.8%.

Exports of goods and services rose 5.9% during the quarter, aided by steady demand from markets like the US.

With inputs from IANS