India’s GDP growth exceeded forecasts, reaching 7.8% in the January-March quarter, despite a slight slowdown from 8.4% in the previous quarter. For the entire fiscal year 2023-24, GDP was revised upwards to 8.2%, surpassing the earlier estimate of 7.6%, according to data from the Ministry of Statistics and Programme Implementation.
This robust GDP performance will be welcomed by policymakers, with Chief Economic Adviser V. Anantha Nageswaran previously suggesting a high possibility of India’s economic growth reaching 8% in FY24. Concurrently, Moody’s Ratings increased India’s growth forecast for the current fiscal year to 6.8% from 6.5%, citing strong economic expansion and post-election policy stability.
The manufacturing sector drove much of this growth, with its GVA rising by 9.9% in FY24, recovering from a 2.2% contraction in the previous year. The mining and quarrying sector also contributed significantly, growing by 7.1% over 1.9% in FY23. However, farm sector growth slowed to 1.4% in FY24 from 4.7% in 2022-23, and the tertiary sector’s GVA decreased to 7.6% from 10.0% in the previous fiscal year.
Real GVA growth for Q4 2023-24 was estimated at 6.3%, with nominal GDP for the quarter at 9.9%. For the full fiscal year, nominal GDP was seen at 9.6%, missing the budget estimate of 10.5%.
“The 8.2% growth estimate for FY24 is significant as it exceeds the psychological mark of 8%. This is primarily due to a strong performance in manufacturing, supported by a low base from the previous year’s negative growth. However, the low prints in agriculture and services remain areas of concern,” said Ranen Banerjee, Partner and Leader Economic Advisory at PwC India.
In Q4, manufacturing sector GVA slowed to 8.9% from 11.5% in Q3. Primary sector GVA was flat at 1.1%, with the farm sector showing a marginal rise and mining and quarrying slowing significantly to 4.3% from 7.5% in Q3.
This indicates a deceleration in real GVA growth to 6.3% in Q4 from 6.8% in the previous quarter.
