India’s GDP to grow 7.3% in FY 2024, says govt estimate - Hindustan Times
close_game
close_game

India’s GDP to grow 7.3% in FY 2024, says govt estimate

Jan 05, 2024 11:19 PM IST

Projections of strong growth amid six hikes of the repo rate by the central bank since 2022 come ahead of the Union Budget in February

NEW DELHI: India remains on track to remain the fastest-growing economy globally, with the country’s first official estimates forecasting robust economic expansion on the back of higher government spending and a boom in the construction sector.

FILE PHOTO: Labourers work at a construction site of the Ahmedabad-Mumbai High Speed Rail corridor in Ahmedabad (REUTERS)
FILE PHOTO: Labourers work at a construction site of the Ahmedabad-Mumbai High Speed Rail corridor in Ahmedabad (REUTERS)

Estimates of gross domestic product released Friday by the Central Statistics Office pegged growth at 7.3% in 2023-24, faster than the Reserve Bank of India’s 7% projection. The economy grew at a provisional 7.2% in the last fiscal year.

Unlock exclusive access to the latest news on India's general elections, only on the HT App. Download Now! Download Now!

Projections of strong growth amid six hikes of the repo rate by the central bank since 2022 come ahead of the Union Budget in February and a general election in the spring of next year in which Prime Minister Narendra Modi will seek a rare third term.

Government spending on infrastructure, construction and a strong services sector are set to be the key drivers of growth, despite a shaky global economy rife with inflation risks and geopolitical conflicts.

The country’s gross value added, a measure of income which strips out indirect tax and subsidies, is expected to climb 6.9%, compared to 7% in the previous fiscal.

Data released on Friday projected that the construction growth will continue in the double digits at 10.7%, compared to 10% in the previous financial year, while mining-sector growth is likely to be 8.1% in the current financial year against 4.6% in 2022-23. Nominal GDP growth, which reflects revenues on which the upcoming budget will be based, is estimated to rise by 8.9%, as against 16.1% in 2022-23.

The financial services, real estate and professional services sector is likely to grow by 8.9% against a growth of 7.1% in 2022-23, the data showed. Agriculture, which still supports nearly half the population, will expand by 1.8%, compared to a 4% expansion in the previous year. Private final consumption expenditure, which is a measure of consumer spending, is seen expanding by 4.4% in FY24.

To be sure, the global economy remains weak and uncertain, which could add more headwinds in the next financial year beginning in April. Inflation will remain a key challenge, especially food prices. Consumer prices, as measured by the Consumer Price Index, rose 5.55%, snapping a three-month decline in November.

The central bank’s revised growth forecast of 7% from 6.3% earlier for 2023-24 was a “conservative estimate”, Michael Patra, RBI’s deputy governor said last month.

The economy grew faster than expected by a wide margin of 7.6% year-on-year in the September quarter, marginally lower than the 7.8% registered in the previous quarter, prompting private forecasters to revise their estimates upwards.

Elevate your career with VIT’s MBA programme that has been designed by its acclaimed faculty & stands out as a beacon for working professionals. Explore now!

Discover the complete story of India's general elections on our exclusive Elections Product! Access all the content absolutely free on the HT App. Download now!
Get latest news on Education along with Board Exam, Competitive Exam and Exam Result at Hindustan Times. Also get latest Job updates on Employment News
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, May 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On