According to GDP figures provided by the Statistics Ministry on Thursday, February 29, the Indian economy increased 8.4% during the October–December quarter of the current financial year 2023–24 (Q3FY24), continuing to be the fastest-growing major economy in the world. Together with strong development in the building and manufacturing sectors and strong domestic demand, the GDP grew at a faster rate.
‘’GDP at constant (2011-12) prices in Q3 of 2023-24 is estimated at ₹43.72 lakh crore, against ₹40.35 lakh crore in Q3 of 2022-23, showing a growth rate of 8.4 per cent. GDP at current prices in Q3 of 2023-24 is estimated at ₹75.49 lakh crore, as against ₹68.58 lakh crore in Q3 of 2022-23, showing a growth rate of 10.1 percent,” stated the National Statistical Office (NSO).
PM Modi mentioned on X, “Robust 8.4 per cent GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!”.
Q3 GDP growth: 5 highlights
1. Q3 GDP growth far outpaces RBI and street expectations
Together with growth forecasts from the Reserve Bank of India (RBI), the GDP growth in the December quarter surged substantially above D-Street estimates. Real GDP growth for 2023–2024 was to be sustained by the RBI at 7%, with Q3 growth of 6.5% and Q4 growth of 6%.
2. The building and manufacturing industries contribute to GDP growth.
According to the NSO, the better-than-expected performance was caused by “double-digit growth in the manufacturing sector, followed by a good growth rate of the construction sector”. In the December quarter, the manufacturing sector, which has only contributed 17% of the third-largest economy in Asia during the last ten years, grew by 11.6% annually.
3. GDP growth for FY24 was revised from 7.3% to 7.6%.
In its second advance estimate of the national accounts, the statistic ministry estimated that the GDP growth for the entire year would be 7.6%. For the current fiscal year, it had predicted growth of 7.3% in its initial advance forecasts, which were made public earlier in January 2024. Additionally, the NSO updated the GDP growth estimate for 2022–2023 from the previous estimate of 7.2% to 7%. With a growth rate of 9.1%, the nominal GDP, or GDP at current prices, is predicted to reach ₹293.90 lakh crore in 2023–24 as opposed to ₹269.50 lakh crore in 2022–23.
4. Private consumption increases 3.5% as government spending decreases 3.2%.
In the December quarter, compared to the same period last year, private consumption increased by 3.5% while government spending decreased by 3.2%. Investment increased 10.6% during the quarter compared to the same period last year. Due to unfavorable weather, agriculture shrank by 0.8%. The services sector, which includes trade, lodging, transportation, communication, and broadcasting services, grew by 6.7%.
5. CEA Nageswaran requests that rating agencies update their estimates for FY24.
Chief Economic Advisor (CEA) V Anantha Nageswaran commented on India’s Q3 GDP report, saying that generally, the country’s economy checks a lot of the appropriate boxes. ‘’The the economy continues to defy expectations underscores the structural transformation. So there is a case for global agencies to make an upward adjustment to their estimate of India’s potential growth”.
