Amid the global decline, India is expected to achieve a GDP growth rate of 7.3%.

India’s GDP is expected to expand by 7.3% in the present fiscal year, which concludes in March. This growth is primarily driven by strong expansion in the manufacturing, construction, and mining sectors. This commendable performance is especially noteworthy considering the sluggish global economy and geopolitical disturbances.

According to the recent data released by the National Statistical Office, the economy is expected to fare better in the 2023-24 period compared to the Reserve Bank of India’s prediction of 7% growth. Additionally, it will also surpass the previous estimates of a 6.5% increase in growth.

Several agencies have raised their growth projections for India due to its strong performance in the second quarter, which saw a growth rate of 7.6%. This is largely attributed to robust domestic demand. Despite China facing various issues such as problems in the real estate sector, India remains the fastest-growing major economy globally. This positive data is significant as it comes before the announcement of the February 1 interim budget and the upcoming LS elections in May. It is expected to strengthen the government’s reputation for effectively managing the economy despite global challenges.

According to NSO, these projections for 2023-24 are preliminary. The estimates may be revised in the future due to better data coverage, actual tax collections, subsidy expenses, and updates provided by other agencies.

The paragraph suggests that the first revised estimates for the benchmark years 2022-23, which are scheduled to be released on February 29, might result in changes to the growth rates mentioned in the initial advance estimate. The statistics office advised users to consider these potential revisions and exercise caution when analyzing the figures.

It is projected that growth in the year 2023-2024 will be primarily driven by a robust manufacturing sector with a 6.5% growth rate, surpassing the previous year’s record of 1.3%. Additionally, the construction sector is expected to grow by 10.7%, building upon a growth rate of 10% in the preceding year 2022-2023.

The data also revealed concerning patterns. The agricultural industry is expected to experience a growth rate of 1.8% in 2023-24, which is lower than the 4% seen in the previous year due to inconsistent monsoon rains. Additionally, the vital services sector is predicted to see a slower growth rate of 7.7% in 2023-24, compared to the 9.5% growth recorded in the previous year.

According to the finance ministry, the preliminary calculations indicate that the economy’s growth momentum continues and there is no sign of it slowing down. The economy’s resilience and strength, which have been bolstered by reforms over the past nine years, have set the groundwork for maintaining a healthy growth rate in the future.

Economists predict that the growth rate in the second half of 2023-24 will decrease compared to the strong 7.7% expansion seen in the first half. Factors such as geopolitical uncertainties, inflation and interest rate trends, and declining global demand are expected to be significant hindrances to achieving a faster rate of expansion.

The worrisome aspect in the GDP data is the slow growth in consumption, standing at 4.4%. This is the slowest growth in consumption in the past two decades, excluding the pandemic year of FY21.

On the other hand, investment has experienced significant growth of 10.3%, driven by substantial capital expenditure by the central and state governments. However, in order for this investment growth to be sustained, it is crucial for consumption growth to be strengthened.

Due to weak global growth, India’s export growth has also been feeble at 1.4% in FY24. The projected nominal GDP growth of 8.9% raises concerns about its potential impact on the fiscal deficit target for FY24, according to Rajani Sinha, chief economist at ratings agency CareEdge.