India GDP Growth by 8.4% in Q3; growth at 7.6% in FY24

On 1st March 2024, India's National Statistical Office (NSO) released updated GDP estimates showcasing accelerated economic momentum. As per data, India's GDP is projected to expand by robust 7.6% in 2023-24, higher than the 7.3% estimated earlier. The significant upgrade factors sustained resilience across industrial and services sectors despite global instability.

For the ongoing fiscal 2022-23 however, growth expectations have been trimmed to 7% from the previously anticipated 7.2% to account for external demand moderation affecting exports. The NSO also revised prior years' GDP upticks - raising 2021-22 expansion to 9.7% while confirming 7% outturn in pandemic-hit 2020-21.

Upward Revision for 2023-24 GDP Growth

The NSO's upgraded 7.6% GDP growth for 2023-24 signals solid recovery after pandemic-induced shocks. The projection remains world-leading, reflective of ramped up infra allocations in recent Budget boosting construction, services sectors alongside government's production-linked incentive (PLI) schemes spurring manufacturing output.

Upside growth risks prevail as private investment gathers pace across technology adoption, renewables expansion etc. Rural consumption remains buoyant with higher agri-wages while urban demand is rebounding across contact-intensive sectors, hospitality, aviation etc.

Stable price environment and low-interest rates are fostering affordability while exporters stand to gain from easing geopolitical tensions and supply chaos. Rapid vaccination coverage and low Covid caseloads buoy consumer mobility further brightening output restoration.

If forecasts hold, 2023-24 would witness highest full-year growth in seven years barring the 2021-22 period which saw statistical rise following the post-Covid plunge in activity during 2020-21.

India GDP Growth Rate in Graph

Quarterly Uplift in 2023-24

Data reveals India’s quarterly real GDP has expanded over 8% successively since Q1 2022-23 (April-June), surpassing pre-pandemic activity levels. This upside momentum is expected to endure through 2023-24.

NSO sees Q1 2023-24 growth at 8.2% followed by 8.1% uptick in Q2. Robust expansion of trade, transport, construction etc accelerated activity in Q3 to achieve eight-quarter high GDP growth of 8.4% according to new data.

Sectoral Trends

Industry - Flagship PLI scheme has bolstered manufacturing competitiveness with firms committing lakhs of crores in investments. Index of Industrial Production confers 15.2% expansion in Dec 2022 confirming upcycle lifting factory output across capital, consumer, intermediate goods.

Infrastructure – Commercial realty, construction activity continues brisk movement as urban housing demand booms while government's focus energizes roads connectivity, metro rail expansion countrywide.

Services – With accelerating credit offtake, air travel rebounding past pre-Covid schedules, festive shopping spree and rising discretionary outlays across QSRs, malls etc, service sector GVA should sustain 7%+ growth over coming year.

Agriculture – Healthy 2022 monsoons capped food prices while lifting rural incomes. But crop output gains may taper going forth and farm GVA is projected to grow barely 3% in 2023-24 as per NSO even as horticulture and allied activities accelerate.

Way Forward

New projections reveal India's emergence as a global outperformer countering worldwide slowdown concerns through its policy catalysts around digitisation, self-reliance, infrastructure expansion with private enterprise participation.

prudent economic management must continue regarding calibrated fiscal spending, ensuring adequate credit for productive sectors while monitoring external ambiguities. The RBI needs to keep tabs on evolving inflation dynamics and balance growth aspirations accordingly.

Structural reforms in labour, export promotion etc. can magnify production-linked incentives' impact to achieve $5 trillion GDP target by 2026. Sustaining consumption and employment revival also remains vital to extend the current upcycle amid risks of widening inequality.