last financial year India’s gross domestic product (GDP) growth rate is expected to be between 6.1 and 6.7 percent in the fourth (January-March) quarter of 2023-24. This is less than the eight percent growth rate recorded in the previous quarters. Various economists have made this estimate. The government will release the fourth quarter GDP data and the growth rate estimate of the economy for the entire financial year on May 31. According to economists, the growth rate in the financial year 2023-24 is estimated to be between 7.6-7.8 percent.
GDP growth is estimated to be 7.6% in the last financial year
The Indian economy grew at 8.2 percent in the June quarter of 2023-24, 8.1 percent in the September quarter and 8.4 percent in the December quarter. Kotak Mahindra Bank Chief Economist Upasana Bhardwaj said the key figures broadly indicate strong growth. He said, “Manufacturing activities have also been good and construction-related and investment sectors should also perform better. However, growth in the agricultural sector may slow down. We estimate that GDP growth will be 6.1 percent in the fourth quarter and this figure will be close to 7.6 percent for the full financial year. According to the estimate released on May 31, 2023, India’s economic growth rate was 6.1 percent in the March quarter of FY 2022-23. This figure was seven percent for the full financial year 2022-23. Bhardwaj said, “We are seeing some slowdown in economic activity in the service sector and the industrial sector. That is why the Gross Value Added (GVA) is expected to be 5.7 per cent and the GDP growth rate is expected to be 6.1 per cent in the fourth quarter.
What is GDP and GVA
GDP is the total value of goods and services produced in a given period. On the other hand, GVA is derived after removing net taxes (removing subsidies from total tax collection) from GDP. He said, “As far as the current financial year (2024-25) is concerned, Kotak Mahindra Bank expects the growth rate to be 6.6 percent. However, there is scope for it to go upwards.”
Rural consumption likely to pick up
Bhardwaj said that rural consumption is likely to pick up. However, export growth may be affected in the second half of the current financial year. He said, “At present, exports remain quite good. We have not seen much impact of any global disruption in demand on exports. However, some impact is expected in the future. This is an area where growth is likely to be affected.” DK Srivastava, Chief Policy Advisor, EY India, said that both domestic and international institutions are projecting a growth rate of seven percent for India in 2024-25.
6.5% growth rate estimated in the fourth quarter
Srivastava said, “The GDP growth rate in the fourth quarter of the last financial year will probably be more than 6.5 percent. In such a situation, this figure will be 7.8 percent for the entire financial year. The International Monetary Fund (IMF) also estimates the same. Another rating agency India Ratings and Research estimates that the country’s economic growth rate will be 6.2 percent in the fourth quarter of 2023-24. Domestic rating agency ICRA had said on Tuesday that India’s GDP growth rate in the fourth quarter of the last financial year will come down to a four-quarter low of 6.7 percent.
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