May 31st 2024.
New Delhi, India's capital city, was abuzz with economic news on Friday as official data revealed that the country's economy had grown at a slower pace of 7.8% in the first quarter of 2024. While this may seem like a setback, the overall annual growth rate for the fiscal year 2023-24 was still an impressive 8.2%. This was mainly due to the strong performance of the manufacturing sector.
This growth has propelled the Indian economy to a staggering $3.5 trillion, bringing the country closer to its goal of reaching $5 trillion in the near future. It is a significant milestone for India, especially considering that in the previous fiscal year of 2022-23, the economy had only grown at a rate of 7%.
In comparison, China, one of the world's leading economies, registered a growth rate of 5.3% in the first quarter of 2024. However, India's economic expansion was higher at 7.8% during the first quarter of 2024, compared to 8.6% in the last quarter of 2023 and 8.1% in the third quarter of the same year.
The National Statistical Office reported that the GDP had grown at a rate of 6.2% in the first quarter of 2022-23, which was significantly lower than the projected GDP growth rate of 7.7% in the second advance estimate released in February.
The data also revealed that the real GDP, or GDP at constant prices, is expected to reach Rs 173.82 lakh crore in 2023-24, higher than the first revised estimate of Rs 160.71 lakh crore for 2022-23. This indicates a growth rate of 8.2% for the fiscal year 2023-24, compared to 7% in the previous year.
In terms of nominal GDP, or GDP at current prices, the estimated growth rate for 2023-24 is 9.6%, with the GDP expected to reach Rs 295.36 lakh crore, compared to Rs 269.50 lakh crore in 2022-23.
The fourth quarter of 2023-24 saw a significant increase in the real GDP, estimated at Rs 47.24 lakh crore compared to Rs 43.84 lakh crore in the same quarter of the previous fiscal year. This represents a growth rate of 7.8%. Similarly, the nominal GDP for the fourth quarter of 2023-24 is expected to be Rs 78.28 lakh crore, a growth of 9.9% compared to the year-ago period.
The Gross Value Added (GVA) for the fiscal year 2023-24 is estimated at Rs 158.74 lakh crore, with a growth rate of 7.2% compared to the final revised estimate of Rs 148.05 lakh crore for 2022-23. This is a significant improvement from the previous year's growth rate of 6.7%.
The manufacturing sector, which saw a growth rate of only 0.9% in the fourth quarter of 2022-23, showed a remarkable improvement with a growth rate of 8.9% in the same quarter of 2023-24. Similarly, the mining sector also saw a growth rate of 4.3% in the fourth quarter, compared to 2.9% in the previous year.
The construction sector, which has been a major contributor to India's economic growth, also showed a positive trend with a growth rate of 8.7% in the fourth quarter of 2023-24, up from 7.4% in the same period of the previous year.
However, the agriculture sector's growth rate has slowed down significantly, with only 0.6% growth in the fourth quarter compared to 7.6% in the previous year. The electricity, gas, water supply, and other utility services segment saw a growth rate of 7.7% in the fourth quarter, compared to 7.3% in the same period of the previous year.
The services sector, which includes trade, hotel, transport, communication, and services related to broadcasting, saw a growth rate of 5.1% in the fourth quarter of 2023-24, lower than the 7% growth in the same period of the previous year. The financial, real estate, and professional services sector also saw a slight decline in growth, with a rate of 7.6% in the fourth quarter, compared to 9.2% in the previous year.
On a positive note, the public administration, defence, and other services sector showed a growth rate of 7.8% in the fourth quarter, a significant increase from the 4.7% growth in the same period of the previous year.
Overall, the Indian economy has shown promising growth in the fiscal year 2023-24, with the manufacturing sector leading the way. This sets the stage for achieving the ambitious target of reaching $5 trillion in the near future.
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