Examining Q3 Consumption Growth and Sectoral Performance

A boost in consumption growth during Q3 suggests a more widespread increase in consumer spending. A robust growth in the agriculture sector is beneficial for supporting mass consumption. The high growth in the Gross Value Added (GVA) of the construction sector in the September quarter, driven by infrastructure spending by central and state governments and a real estate rebound, needs examination to ascertain if this momentum is sustained.

The Q3 data will reveal if there is any enhancement in the ‘trade, hotels, transport, communication, and broadcasting services,’ a significant job provider. The manufacturing sector exhibited strong growth with a 13.91 percent increase in GVA in Q2. Q3 figures will clarify whether this was a short-lived surge or indicative of a lasting trend.

An upturn in the percentage of Gross Fixed Capital Formation (GFCF) to GDP signifies a long-awaited upswing in corporate capital expenditure. According to the Reserve Bank of India (RBI) researchers’ nowcast in the State of the Economy report, Q3 GDP growth is estimated at 7 percent. The corporate GVA numbers offer insights into the broader economy, as many overall GVA quarterly estimates are derived by extrapolating corporate GVA to the entire economy.