India's GDP grows at 4.4% in Q3; economy to expand at 7% in FY23

India's economic growth decelerated to 4.4% in the October-December quarter of this fiscal mainly due to a contraction in the manufacturing sector.

The Gross Domestic Product (GDP) growth was 11.2% in October-December 2021 and 6.3% in July-September 2022, showed the data released by the National Statistical Office (NSO) on Tuesday.

The manufacturing sector's output, as per the gross value added in the third quarter of this fiscal, contracted by 1.1% compared to a growth of 1.3% in the year-ago period.

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The NSO also released the second advance estimate for the current fiscal and maintained its growth projection of 7%, as was estimated in the first advance estimate, released in January.

"GDP at Constant (2011-12) Prices in Q3 2022-23 is estimated at Rs 40.19 lakh crore as against Rs 38.51 lakh crore in Q3 2021-22, showing a growth of 4.4%. GDP at Current Prices in Q3 2022-23 is estimated at Rs 69.38 lakh crore as against Rs 62.39 lakh crore in Q3 2021-22, showing a growth of 11.2%," the NSO statement said.

"Real GDP or GDP at Constant (2011-12) Prices in the year 2022-23 is estimated at Rs 159.71 lakh crore as against the First Revised Estimates of GDP for the year 2021-22 of Rs 149.26 lakh crore. The growth in real GDP during 2022-23 is estimated at 7% compared to 9.1% in 2021-22," the NSO said.

The NSO revised upward the GDP growth for 2021-22 to 9.1% from the 8.7% estimated earlier.

The national accounts data showed that the farm sector gross value added (GVA) has grown by 3.7% in the third quarter compared to a growth of 2.2% a year ago.

The mining and quarrying sector grew 3.7% compared to 5.4% a year ago. The construction sector grew 8.4% in the quarter compared to 0.2% growth a year ago.

The electricity, gas, water supply, and other utility services segment grew 8.2% compared to 6% growth a year ago.

GVA growth in the services sector—trade, hotel, transport, communication, and services related to broadcasting—was 9.7% during the third quarter against 9.2%.

Financial, real estate, and professional services grew by 5.8% in the third quarter over 4.3% earlier. Public administration, defence, and other services posted 2% growth against 10.6% in the third quarter of the last fiscal.

"Real GDP or GDP at Constant (2011-12) Prices for the years 2021-22 and 2020-21 stand at Rs 149.26 lakh crore and Rs 136.87 lakh crore, respectively, showing a growth of 9.1% during 2021-22 compared to a contraction of 5.8% during 2020-21," the NSO said.

Nominal Net National Income (NNI) or NNI at current prices for the year 2021-22 stands at Rs 203.27 lakh crore as against Rs 172.23 lakh crore in 2020-21, showing a growth of 18% during 2021-22 as against a contraction of 3% in the previous year, it stated.

Per Capita Income or Per Capita Net National Income at current prices is estimated at Rs 1,27,065 and Rs 1,48,524, respectively, for the years 2020-21 and 2021-22, it stated.

Gross Capital Formation (GCF) at current prices is estimated at Rs 73.62 lakh crore for the year 2021-22 as compared to Rs 55.27 lakh crore during 2020-21, it stated.

The rate of GCF to GDP is 31.4% during 2021-22 as against 27.9% in 2020-21. The rates of capital formation in the years 2011-12 to 2019-20 and 2021-22 have been higher than the rate of saving because of positive net capital flow from RoW (rest of the world), it stated.

In terms of the share to the total GFCF (at current prices), the highest contributor is non-financial corporations, followed by the household sector, the share of which stood at 44.1% and 40.5%, respectively, in 2021-22, it stated.

The rate of GCF to GDP at Constant (2011-12) Prices was 31.7% in 2020-21 and 35.5% in 2021-22, it stated.

Gross savings during 2021-22 are estimated at Rs 70.77 lakh crore as against Rs 57.17 lakh crore during 2020-21, it stated.

The share of non-financial corporations, financial corporations, general government, and household sectors in gross savings during 2021-22 stands at 35.3%, 8.4%, (-) 8.9%, and 65.3%, respectively.

The rate of Gross Saving to GNDI (Gross National Disposable Income) for 2021-22 is estimated at 30% against 28.4% for 2020-21, it stated.

(This article has been updated with fresh inputs.)