India’s real GDP seen growing at 7.3% in the current fiscal

India’s economy is expected to grow at a robust 7.3 per cent in the current financial year (April-March 2023-24) against the 7.2 per cent growth in the previous financial year (April-March 2022-23), as per the first advance estimates of national income released by the National Statistics Office (NSO) on Sunday (31 December 2023).

India’s economy in terms of real gross national product, or GDP, (at constant 2011-12 prices) is estimated to reach Rs171.79 lakh crore in the year 2023-24, growing at a pace of 7.3 per cent from Rs160.06 lakh crore in the previous financial year, as per provisional estimates.

India’s real GDP grew at an estimated 7.2 per cent in 2022-23.

Nominal GDP (or GDP at current prices) is estimated to grow at a faster pace of 8.9 per cent to reach Rs286.58 lakh crore in the current fiscal ending 31 March 2024, against the provisional estimate of a much higher 16.1 per cent growth of GDP to Rs272.41 lakh crore in the year ended 31 March 2023.

The estimates are based on the higher growth rate by the various sectors of the economy, with construction sector leading the pack with an estimated growth of 10.7 per cent.

All the economic sectors have fared well, growing at more than 6 per cent, except for agriculture and allied sector, which is estimated to grow at 1.8 per cent compared to the 4 per cent growth in the previous fiscal.

However, the NSO expects Gross Value Added (GVA) in the economy to grow at a slower pace of 6.9 per cent in 2023-24 against the 7 per cent growth in 2022-23, which in turn projects a nominal GDP growth of 8.9 per cent compared to the budget estimate of 10.5 per cent. 

GVA growth for sectors like trade, hotels, transport, communication and services is estimated to moderate to 6.3 per cent from 14 per cent in 2022-23. 

With consumption still lagging behind, some economists see the estimates as too optimistic. They also fear the fiscal deficit breaching the projection of  5.9 per cent of GDP and reaching 6 per cent.

A United Nations report, released on Friday projects India’s gross domestic product (GDP) growing at a slower pace of 6.2 per cent in the 2024 calendar year against the earlier estimate of 6.7 per cent.

“Growth in India is projected to reach 6.2 per cent in 2024, slightly lower than the 6.3 per cent estimate for 2023, amid robust domestic demand and strong growth in the manufacturing and services sectors,” said the World Economic Situation and Prospects (WESP) report.

According to the report, GDP in the South Asian region as a whole grew at an estimated 5.3 per cent in 2023 and is projected to grow by 5.2 per cent in 2024, led by the Indian economy.