India Reports GDP Growth of 7.8% in Q4 on Services Sector Output Boost
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Article summary
India recorded a GDP growth rate of 7.8% in the fourth quarter (Q4), driven primarily by a robust expansion in the services sector output. This performance reaffirms India's position as one of the fastest-growing major economies globally, outpacing China and most G20 peers. The services sector, which contributes over 55% to India's GDP, has been the dominant engine of growth, encompassing IT, financial services, trade, hospitality, and communication. The strong Q4 print also reflects resilient domestic consumption, improved business confidence, and a recovery in urban demand despite global headwinds such as elevated interest rates and geopolitical uncertainties. For UPSC aspirants, this data point is critical for understanding India's structural economic transformation, the role of services-led growth, and its implications for employment, fiscal consolidation, and the broader goal of becoming a developed economy by 2047.
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Sample questions — answers revealed after test
Q1. Which of the following correctly expresses the relationship between Gross Domestic Product (GDP) and Gross Value Added (GVA) as used in India's national income accounting?
Q2. A government economist is analysing India's Q4 GDP growth figure of 7.8% and needs to determine which of the following statements correctly applies principles of India's national income methodology. Which one of the following is correct?
Q3. Consider the following statements regarding India's GDP growth and the structural characteristics of its economy as reflected in Q4 performance: 1. A high GDP growth rate driven primarily by the services sector is structurally concerning because services contribute approximately 55% to GVA but employ a disproportionately smaller share of the workforce relative to agriculture. 2. If India's GDP grows at 7.8% in real terms while the GDP deflator registers 4%, then nominal GDP growth for the same period would be approximately 11.8%. 3. Strong GDP growth automatically improves India's sovereign credit rating, as rating agencies like Moody's and S&P use GDP growth as the sole determinant of creditworthiness. 4. The 'jobless growth' critique of services-led GDP expansion is rendered invalid if the informal manufacturing sector records simultaneous employment gains, since GDP aggregates output across all sectors. Which of the statements given above are correct?