India's GDP Growth Surges to 8.2% in Financial Year 2023-24

India's economy has demonstrated remarkable resilience and strength, as evidenced by the latest provisional estimates released by the National Statistical Organisation (NSO). According to the data, the Gross Domestic Product (GDP) growth rate surged to an impressive 8.2 percent in the financial year 2023-24 (FY24), surpassing earlier projections by the Reserve Bank of India (RBI) and the government.

This robust performance marks the ninth time since 1960-61 that the Indian GDP has grown by 8 percent or more in a financial year, highlighting the country's economic dynamism and potential. The unexpectedly high growth rate of 8.2 percent in FY24 can be attributed to the strong performance of the economy in the fourth quarter (January-March 2024), which witnessed a growth of 7.8 percent compared to the corresponding period in 2023.

Quarterly GDP Growth Trends

The Indian economy's growth trajectory in FY24 was characterized by consistent and impressive quarterly performance. In the first quarter (April-June 2023), the GDP grew by 8.2 percent, setting a solid foundation for the year. The momentum continued in the second quarter (July-September 2023) with a growth rate of 8.1 percent, showcasing the economy's resilience amid global uncertainties.

The third quarter (October-December 2023) witnessed an even higher growth rate of 8.6 percent, reflecting the robust domestic demand and the positive impact of policy measures implemented by the government. However, the fourth quarter (January-March 2024) saw a slight moderation, with the GDP growth rate settling at 7.8 percent, still a commendable figure by any standard.

The consistent quarterly growth rates underscore the Indian economy's ability to withstand external shocks and maintain a strong domestic growth momentum. This performance is particularly noteworthy given the challenges posed by global economic uncertainties, geopolitical tensions, and supply chain disruptions during the year.

Sectoral Contributions and GVA Growth

The impressive GDP growth in FY24 was driven by significant contributions from various sectors of the economy. The manufacturing sector emerged as a key driver, registering a remarkable growth rate of 9.9 percent, reflecting the government's efforts to promote domestic manufacturing and the Make in India initiative.

The mining and quarrying sector also played a pivotal role, growing at a robust rate of 7.1 percent. This growth can be attributed to increased demand for raw materials from the manufacturing and construction sectors, as well as the government's focus on enhancing mineral exploration and production.

The Gross Value Added (GVA), which measures the value of goods and services produced in the economy, grew by 7.2 percent in FY24 at constant prices (base year 2011-2012). The nominal GVA, which takes into account the impact of inflation, was estimated at Rs 267.62 lakh crore, representing a growth rate of 8.5 percent compared to the previous fiscal year.

These strong GVA figures highlight the broad-based nature of the economic growth, with contributions from various sectors and a balanced mix of domestic and external demand. The government's efforts to address structural issues, promote investments, and implement reforms have played a crucial role in fostering an enabling environment for businesses and driving economic growth.

Outlook and Future Prospects

The impressive GDP growth rate of 8.2 percent in FY24 has set a strong foundation for India's economic prospects in the coming years. The Reserve Bank of India (RBI) has maintained its GDP growth forecast for the financial year 2024-25 (FY25) at 7 percent, indicating continued optimism and confidence in the Indian economy's growth trajectory.

The RBI has also set quarter-wise growth targets for FY25, with projections of 7.1 percent for the first quarter, 6.9 percent for the second quarter, and 7 percent and 6.9 percent for the third and fourth quarters, respectively. These projections reflect the central bank's assessment of the global economic resilience, expected growth in global trade, and the potential challenges posed by inflation and worsening debt situations in advanced economies.

India's foreign exchange reserves reaching an all-time high of $645.6 billion as of March 29, 2024, further bolsters the country's economic resilience and provides a cushion against external shocks. Additionally, the growth in the combined Index of eight core industries, which recorded a provisional growth of 6.2 percent in April 2024, bodes well for the country's industrial sector and overall economic performance.

As India continues to navigate the global economic landscape, its robust domestic demand, policy reforms, and focus on structural transformations will play a pivotal role in sustaining and accelerating economic growth in the years to come.