q1 GDP data for fi25 has moderated to a five quarter low at 6.7% now if we compare this to the data that came in on q1 fi 24 which was at 8.2% that is a comparison as far as the same quarter last year is concerned if we compare it to the previous quarter the data had come in at 7.8% which is Q4 fi 24 so for all our viewers to understand q1 GDP data has moderated to a 5 quarter low at 6. 7% what really has led to the decline when we were seeing the broad highlights we saw that agriculture has weakened government expenditure has weakened and we seen that manufacturing and construction really have seen a strong uptick but what really are the key reasons for this sharp decline uh to decod this I'm joined by mitali nikor senior Economist sanch mukarji senior business Economist thank you both for your time first what really is do you make of the data is this unexpected lines are you disappointed to you first thank you so much for having me here sakshi it's always a always a pleasure to be on your show uh well uh for me it was on expected lines because I feel you know in India uh every quarter every month there's so much of an upgrade to the GDP quarter on quarter by every forecaster in town right uh but having said that let's understand this quarter specifically uh was a unique quarter because it also encompassed the Lo SAA elections typically in an election quarter the government spending government expenditure is a bit subdued and that's a that's taken for as a given right so that would have an impact because if you see if you were to analyze uh the entire last year a lot of and a couple of years even prior to that what we are struggling with as an economy firstly the good thing the good news is India Still Remains to be the brightest economic spot globally you know our Global growth uh as a GDP as a country is very strong our GV is very strong uh China is growing at a 4.7% most of the developed markets developed economies are struggling with very unique issues India is a very large economy very Diversified economy we have a demographic dividend which is very strong so this that's a good news now uh coming back to the not so good news is the fact which remains that agriculture is in doldrums uh the reading on agriculture has come to be way below of the mark now why is that happening is because uh year uh quarter on quarter year on year if you were to see there is very little effective utilization of resources done in a very productive manner we are contingent to the vages of the monsoons every quarter this quarter specifically there was an immense Heat Wave so which did affect agricultural output to a very large extent right so we need to analyze how we are allocating resources how we are going about with infrastructure specifically addressed to agriculture on Manu manufacturing front if you were to see the government has done a phenomenal job in terms of the pl schemes the production linked incentive per sector which has come about the China plus one policy push which has made making India quite effective you know we have come across as the factory to the world as an option but this window will not stay open for too long we need to understand that as a country because once China bounce bounces back uh we might not have that option so it's very important that the government focuses even further on this and addresses the labor law and the land reforms which we have so far not addressed as a country because 85% of a Workforce is still there in agriculture which is not that big a productive sector if one were to look at it so why is that happening why can't we make labor more effectively available to manufacturing so that private set up private factories can be put up thirdly the consumption is a bit of an issue because rural consumption has been very slow for many quarters given that monsoons have been very uneven sometimes there's a flood at other regions of India there's a drought very uneven Monsoon uh dispersion hence rural consumption has been very slow now we are seeing a lot of slowness which is kept up even in urban consumption so how do you spur private companies to invest unless they see that kind of demand so job creation unemployment these are things government needs to look at so that Urban consumption remains intact along with manufacturing infrastructure all right and malali your first thoughts disappointing or in line with expectations of course we're hearing mixed views at the moment uh your first thoughts thanks thanks saki for bringing me in and of course you know uh I'm always mostly in agreement with San's point so this is no difference but I think headline numbers wise this is in line with expectations we were expecting a range of 6.6 to 7 uh you know for this quarter and and this is a little bit on the lower side but you know headline numbers are within the range but what is definitely concerning to me as a you know as an analyst and which I have been looking at the numbers is the Slowdown at a sectoral level within agriculture has been quite sharp it's a reduction from a 3.7 growth to a 2.0 uh you know kind of growth and postco you know agric culture has been a very resilient sector for the economy given of course that it employs a large proportion of the population and also a large proportion of women uh in the population employed in the agriculture sector so therefore it becomes a very important source of livelihood for a large section of our population and you know looking at that this 2% growth is concerning because of course heat WS have contributed but floods have also contributed droughts have also contributed and all of these climatic events are only going to keep increasing so we need to see a strategy around agriculture where we invest in climate resilient infrastructure we invest in irrigation infrastructure even today 2third of the districts of the country are not covered by the irrigation system so we really need to see more and more investment going in there and then we need to look at Innovation like high yielding variety of seeds drought res drought resistant seeds you know which can come into these uh into come into the sector incentivized and deployed across the country but the other point that I want to make is also around manufacturing and services so of course we've noted that the increase in manufacturing is very encouraging it's increased from a 5% growth to a 7% growth and construction sector also going from an 8% to a 10% 10.5% growth in fact but when you look at the sub sectors Ste doing very well cement absolutely flat and that's again concerning because you know why is it that a leading sector like cement should be you know so flat in a full quarter it of course coincides with the election and you know the fact that decision making especially around construction projects slows down during elections but it could also be a Pender of what is happening in the real estate space so again you know something to watch out for something for the government to look at and consult with cement companies and the other point is around passenger traffic which is a very good indicator of consumption and you know the buoyancy of consumption there we are seeing a Slowdown in both the air traffic and the rail traffic so you know again it indicates the consumption slowdown both in urban and rural segments so we really need to look at how can we make the consumption easier for the you know Indian consumer and for doing that of course a rate cut looking at you know monetary measures might be the answer right so the rate cut may be an answer land labor reforms may be the answer and like you said Focus areas that you all have talked about specific sectors really that need attention and need attention soon so that India can continue to outperform in the global economy thank you so much for sharing your thoughts and of course decoding this GDP data for our viewers