India's GDP to grow 7.3% in 2023-24: Govt estimates

The Indian economy is estimated to grow 7.3% in the 2023-24 fiscal against 7.2% a year ago, mainly due to good show by mining and quarrying, manufacturing and certain segments of the services sectors.

As per the first advance estimates of national income released by the National Statistical Office (NSO) on Friday, the manufacturing sector output is estimated to grow to 6.5% in the current fiscal compared to 1.3% in 2022-23.

Similarly, mining sector growth is estimated at 8.1% in the current fiscal against 4.1% in 2022-23. Financial services, real estate, and professional services are estimated to record a growth of 8.9% this fiscal compared to 7.1% in FY23.

"Real GDP or GDP at constant (2011-12) prices in the year 2023-24 is estimated to attain a level of Rs 171.79 lakh crore, as against the provisional estimate of GDP for the year 2022-23 of Rs 160.06 lakh crore, released on 31st May 2023," said a statement from NSO.

Commenting on the numbers, the finance ministry, in a post on X, said the first advance estimates of FY24 show no let-up in the growth momentum of the economy.

"Resilience and strength of the economy underpinned by reforms of the last nine years have laid the foundations for the economy to sustain a healthy growth rate in the coming years," it said.

According to the statement, the growth in real GDP during 2023-24 is estimated at 7.3% compared to 7.2% in 2022-23. The NSO estimates are higher than the 7% GDP growth projection of the Reserve Bank of India (RBI) for the current fiscal.

It also said that nominal GDP or GDP at current prices in the year 2023-24 is estimated at Rs 296.58 lakh crore against the provisional estimate of GDP for the year 2022-23 of Rs 272.41 lakh crore. The growth in nominal GDP during 2023-24 is estimated at 8.9% compared to 16.1% in 2022-23.

The size of the economy, as per the current estimates, is slated to be at Rs 296.58 lakh crore or $3.57 trillion (@Rs 83/USD) during 2023-24.

The agriculture sector is projected to see a growth of 1.8% this fiscal, lower than the 4% expansion recorded in the previous financial year.

Trade, hotel, transport, communication and services related to broadcasting segment is estimated to grow at 6.3%, down from 14% in 2022-23. The construction sector is likely to grow at 10.7% year on year from 10% in the current fiscal. Similarly, public administration, defence and other services growth is estimated to grow 7.7% this fiscal against 7.2% in FY23.

The growth in gross value added (GVA) at basic prices is pegged at 6.9% this fiscal, down from 7% in 2022-23.

SBI, in a research report, said the expenditure side trends are largely dictated by the trends in the nominal GVA, which has slowed down quite sharply.

"The nominal GVA registered a growth of 8%, a decline by 7.4% from the previous year. The sluggishness in GVA directly impacts demand. Consequently, private consumption therefore is expected to slow down. The real private consumption growth is estimated at 4.4% in FY24, down from 7.5% in FY23," it said.

Gross fixed capital formation remains the only stable head under expenditures, which is estimated to grow at 10.3%.