India’s Economy Grows 7.6%

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 a robust 7.6% in 2023-24, higher than the 7.3% estimated earlier. The significant upgrade factors sustained resilience across the 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

India’s GDP growth has been revised to 7.6% for 2023–24 by the NSO, reflecting a strong post-pandemic recovery.

• This world-leading growth is driven by increased infrastructure spending and successful PLI schemes boosting manufacturing and services.

• Private investment is picking up in key areas like technology and renewable energy.

• Rural consumption remains strong, and urban demand is improving in sectors like hospitality and travel.

• Stable inflation, low interest rates, and easing global supply issues are further supporting economic activity.

• If this momentum continues, 2023–24 could mark India’s strongest growth in seven years, excluding the post-COVID rebound in 2021–22.

India's 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 an 8.1% uptick in Q2.

• Robust expansion of trade, transport, construction, etc, accelerated activity in Q3 to achieve an 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, and intermediate goods.

• Infrastructure – Commercial realty, construction activity continues brisk movement as urban housing demand booms while the government's focus energizes road 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 the coming year.

• Agriculture – Healthy 2022 monsoons capped food prices while lifting rural incomes. But crop output gains may taper going forward, 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 the production-linked incentives' impact to achieve the $5 trillion GDP target by 2026. Sustaining consumption and employment revival also remains vital to extend the current upcycle amid risks of widening inequality.

Final Thoughts

India’s upgraded GDP projection of 7.6% for 2023–24 highlights its resilience and strong economic fundamentals, despite global uncertainties.

Backed by robust performance in manufacturing, services, and infrastructure, the economy is showing broad-based momentum across sectors. Continued policy focus on investment, digital transformation, and structural reforms will be key to sustaining this growth path.

As India eyes its $5 trillion economy goal, maintaining macroeconomic stability, fostering inclusive development, and addressing external risks will be critical to ensuring long-term, equitable economic expansion.