Economy of India / Good news came from the core and service sectors, this is how the economy benefited

Economy of India: Although the country's GDP has reached the lowest level in the last two years in the second quarter, there has been good news for the Indian economy from the core and service sectors. While the core sector figures are looking better than September, service exports have also registered positive growth for the second consecutive month. Let us know what changes have come in these two sectors and how it will affect the country's economy.

Improvement in core sector

The production of the country's eight major basic industries declined to 3.1 percent in October 2024, as against 12.7 percent in October last year. However, this figure is better than September 2024, when it was 2.4 percent. There has been a decline in the production of crude oil and natural gas in October, but the production of coal, fertilizers, steel, cement and electricity increased by 7.8 percent, 0.4 percent, 4.2 percent and 0.6 percent respectively.

It is worth noting here that these figures were much higher in October last year, such as coal (18.4 percent), fertilizers (5.3 percent), steel (16.9 percent) and electricity (20.4 percent). But still, recent figures show a positive change, indicating that the core sector is gradually improving.

According to the data from April to October this year, the growth rate of eight major infrastructure sectors was 4.1 percent, which was 8.8 percent in the same period last year. These eight sectors contribute 40.27 percent to the Index of Industrial Production (IIP).

Increase in service exports

On the other hand, according to data released by the Reserve Bank of India, service exports grew by 22.3 percent to $ 34.3 billion in October 2024. This is the second consecutive month of growth, which shows the strong position of the Indian service sector.

This figure is higher than September, when service exports reached $ 32.57 billion. Similarly, imports also increased to $17.21 billion in October, up 27.9 per cent. This makes it clear that the Indian services sector is growing steadily, which is strengthening the country's economy.

Reason for decline in GDP

Although the core and service sectors are improving, the country's GDP has declined in the second quarter. GDP growth declined to 5.4 per cent in the July-September quarter, which is the lowest level in the last two years. This growth rate was 8.1 per cent in the same quarter last year, while it was 6.7 per cent in the April-June, 2024 quarter.

The main reasons for this have been the weak performance of the manufacturing and mining sectors and a decline in consumption. Nevertheless, India still remains the fastest growing major economy in the world, indicating better growth opportunities in the times to come.

Conclusion

The country's GDP may have declined, but the data from the core and service sectors indicate that the Indian economy is steadily working towards recovery. The core sector is growing slowly, while the continued growth in the service sector can be expected to give further impetus to the economy in the coming months.