Economy to grow by 7.3% in current fiscal against 7.2% expansion in FY23

NSO estimates India's real GDP growth at 7.3% in 2023-24, higher than RBI's 7% projection. GVA growth for Manufacturing and Construction to accelerate, while Farm and Trade sectors to slow.

India’s real GDP growth in 2023-24 is estimated at 7.3% as compared to 7.2% in 2022-23, as per the first advance estimates of national income released by the National Statistical Office (NSO) on January 5. The NSO’s economic growth estimates are higher than the 7% growth for the year recently projected by the Reserve Bank of India.

As per initial estimates from the NSO, real GDP growth in the first half of this year stood at 7.7%. Following that estimate, the central bank had, in December, raised its growth estimate for the year to 7% from a 6.5% forecast earlier.

Despite a year-on-year uptick in the GDP growth rate, the NSO expects the growth in Gross Value Added (GVA) in the economy to ease slightly from 7% in 2022-23 to 6.9% this year.

The share of private final consumption expenditure in GDP is expected to drop this year to the lowest in at least three years at 56.9% from 58.5% in 2022-23.

GVA growth for the farm sector is estimated to more than halve from 4% a year ago to 1.8% this year, as is the case for Trade, Hotels, Transport, Communication and Services whose GVA uptick is estimated to moderate to 6.3% from 14% in 2022-23.

However, Manufacturing GVA growth is estimated to accelerate to 6.5% in 2023-24 from just 1.3% a year earlier, while mining GVA is expected to rise 8.1%, from 4.6% in 2022-23. Construction GVA growth is reckoned to remain solid at 10.7% this year, on top of the 10% uptick recorded in 2022-23.

GVA growth from utilities like electricity, gas and water supply is pegged at 8.3%, from 9% last year, while Financial, Real Estate and Professional Services’ GVA is expected to speed up to 8.9% from 7.1% in 2022-23.