India's Real GDP Estimated To Grow 7.3% In FY24: National Statistics Office Here is a look at the estimates for different sectors
By S Shanthi
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
India's real gross domestic product (GDP) for the current financial year (FY24) is expected to grow by 7.3%, compared with 7.2% in FY23, the first advanced estimates released by the National Statistics Office (NSO) said.
This advance estimate data is higher than the Reserve Bank of India's recent revision of growth to 7% from an earlier estimate of 6.5%. And, this data will be the base on which the Finance Ministry will build projections and assumptions for the next budget, expected to be presented on Feb 1.
NSO 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.
Despite the global slowdown, the Indian economy is one of the fastest-growing economies in the world. According to the International Monetary Fund (IMF), India is one of the "star performers" that's estimated to contribute 16% to the global growth in 2023-24.
Here is a look at the estimates for different sectors:
Manufacturing
The NSO estimates on Friday said that the manufacturing sector output is estimated to grow to 6.5% in the current fiscal compared to 1.3% in 2022-23. "Based on the SBI index, we believe IIP & IIP manufacturing may grow in the range of 3.5-4.0% in Nov and Dec 2023. Going forward, the surge in profitability, aided by easing input costs, is expected to sustain this dynamism. As inflation eases, a revival of topline growth will support the manufacturing expansion," said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, in a report shared with us.
Mining
The Indian mining industry consists of a large number of small operational mines. According to the Ministry of Mines, the number of mines that reported mineral production (excluding minor minerals, fuel minerals and atomic minerals) in India was 1319 in 2021-22 as against 1375 in the previous year. As per NSO estimates, the 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
The Indian services sector saw the largest FDI inflows worth $ 105,400.88 billion between April 2000-June 2023. And, the current NSO data says that while the construction sector is seen at 10.7 per cent from 10 per cent last fiscal, financial services, real estate and professional services are estimated to record a growth of 8.9% this fiscal compared to 7.1% in FY23.
Agriculture
The estimates say that all the economic sectors have fared well by witnessing more than 6%, except for Agriculture and Allied sector, for which the estimated growth is 1.8%. Gross Value Added (GVA) growth for the sector is estimated to more than halve from 4% a year ago to 1.8% this year. Experts have raised concern over this slowdown in agriculture. The uneven monsoon has a huge impact on India's economy. Meaning, a successful monsoon season increases farm production, thereby increasing the income of both farmers and labourers.
Trade, Hotels, Transport, Communication and Services
A similar slowdown is observed for Trade, Hotels, Transport, Communication and Services whose GVA uptick is estimated to moderate to 6.3% from 14% in 2022-23. Economists have expressed that this has merged as a worry.
Overall private consumption: a cause of concern
The latest data talks about continuing weakness in consumption, which experts feel is a reason to worry. Private consumption is expected to grow at 4.4 per cent this year. This, according to media reports, is the slowest consumption growth in the past two decades except 2020-21." Experts say that this could be due to lower incomes in both rural and urban pockets.
The NSO has also said that the share of private final consumption expenditure in GDP is expected to drop this year. And, that could be the lowest in at least three years at 56.9% from 58.5% in 2022-23. However, the investment activity is expected to stay positive.
