India's Economic Growth Slows but Remains Fastest Globally

India's economic growth decelerated to 6.7% in the April-June quarter, influenced by reduced government spending during national elections. Despite slower growth compared to forecasts, it surpassed China's 4.7% growth. Economists predict temporary slowdown with strong future growth driven by easing inflation and increased government expenditure.

India's economic growth slowed to 6.7% year-on-year in the April-June quarter as a decline in government spending during national elections weighed, according to official data released on Friday. Despite the slowdown, India maintained its position as the world's fastest-growing major economy.

The country's Gross Domestic Product (GDP) growth was slightly below the 6.9% projected by a Reuters poll and a step down from 7.8% growth in the previous quarter. However, economists are optimistic that easing inflation and a resurgence in government spending will support growth in the upcoming months.

Chief Economic Adviser V. Anantha Nageswaran emphasized that strong investment demand and upbeat business sentiments sustain India's growth momentum. Prime Minister Narendra Modi's recent economic reforms and national budget initiatives are expected to further bolster the economy.

Gross Value Added (GVA), considered a more reliable indicator, increased by 6.8% in April-June compared to 6.3% in the previous quarter. Consumer spending surged to a seven-quarter high, while capital investments saw a notable rise.

Despite the positive outlook, India faces challenges in job creation and achieving inclusive growth. The government's focus on infrastructure spending and anticipated policy rate cuts could stimulate economic activity and private investments in the near future.

(Additional reporting by Sarita Chaganti Singh, Shivangi Acharya; Graphics by Vineet Sachdev; Edited by Susan Fenton and Louise Heavens)

(With inputs from agencies.)