India's GDP likely to grow by 7.3 per cent in FY24, govt's first advance estimate shows

The initial advance estimate released by the National Statistical Office (NSO) on Friday anticipates a 7.3 per cent annual growth for the Indian economy in the current fiscal year, building upon the 7.2 per cent expansion witnessed in FY23.

Presenting the first advance estimates of National Income for 2023-24, the NSO stated, "Real Gross Domestic Product (GDP) or GDP at Constant (2011-12) Prices for the year 2023-24 is projected to reach Rs 171.79 lakh crore, compared to the Provisional Estimate of GDP for 2022-23 at Rs 160.06 lakh crore, disclosed on May 31, 2023."

The Nominal GDP or GDP at Current Prices for 2023-24 is expected to be Rs 296.58 lakh crore, signaling a growth rate of 8.9%. This marks a decrease from the substantial 16.1% growth observed in the previous fiscal year, 2022-23.

The government envisions Gross Value Added (GVA) growth for FY24 at 6.9% Year-on-Year, a slight dip from the 7% recorded in FY23.

In December 2023, the Reserve Bank of India (RBI) revised its forecast GDP growth rate in the fiscal year 2023-24, increasing it to 7 per cent from the initial projection of 6.5 per cent.

It is also noteworthy that the Indian economy surpassed expectations by growing at a faster-than-expected rate at 7.6 per cent year-on-year in the September quarter.

Sector-wise Growth

The construction sector is expected to exhibit robust growth with a double-digit increase of 10.7 Per cent. Meanwhile, the government envisions a substantial expansion in the manufacturing industry, projecting a growth rate of 6.5 per cent for FY24, a significant improvement from the 1.3 per cent recorded in FY23. Notably, the manufacturing sector constitutes approximately 17 per cent of India's total GDP.

In contrast, the trade, hotels, transport, communication, and broadcasting-related services industry is anticipated to experience a growth slowdown, with a projected rate of 6.3 per cent in FY24, compared to the 14 per cent registered in FY23.

The mining and quarrying industry, which demonstrated a growth rate of 4.6 per cent in FY23, is poised for an accelerated expansion at 8.1 per cent in FY24. This reflects a positive outlook for the sector's economic contributions.

Conversely, the agriculture, livestock, forestry, and fishing sector, constituting around 15 per cent of the GDP, is projected to grow at a modest rate of 1.8 per cent in FY24, down from the 4 per cent growth observed in FY23.

In summary, all economic sectors are displaying favorable growth trends, surpassing the 6 per cent mark, except for the Agriculture and Allied sector, which is estimated to grow at 1.8% per cent. These projections provide a comprehensive overview of the diverse performance across key sectors of the Indian economy in the fiscal year 2024.