GDP growth surges to 8.2% on manufacturing gains

India’s real Gross Domestic Product (GDP) for FY24 is estimated to have grown by a faster-than-projected 8.2%, quickening from FY23’s 7% pace, the National Statistical Office (NSO) said in its provisional estimates released on May 31. The NSO had in its first advance estimates, earlier this year, projected real GDP growth for FY24 at 7.3%.

“Nominal GDP has witnessed a growth rate of 9.6% in FY24 over the growth rate of 14.2% in FY23,” the NSO said, adding that real Gross Value Added (GVA) had likely expanded by 7.2% in FY24, compared with FY23’s 6.7% pace.

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“This GVA growth has been mainly due to significant growth of 9.9% in manufacturing sector in FY24 over -2.2% in FY23 and growth of 7.1% in FY24 over 1.9% in FY 23 for mining and quarrying sector,” the NSO explained.

Real GVA and GDP growth in Q4 have been estimated at 6.3% and 7.8%, respectively.

“While the high frequency indicators were showing healthy economic momentum, nevertheless the sharp jump in GDP growth number for FY24 has come as a positive surprise,” said Rajani Sinha, Chief Economist, CareEdge Ratings.

“The fourth quarter GVA growth is broadly in line with expectations, however, upward revisions in GVA of previous quarters have pushed up the overall growth for FY24. Moreover, the divergence in GDP and GVA growth seen in Q3 has continued, with net taxes growing by 22% in Q4,” she said.

“This has propelled the GDP growth for Q4. The breakup of GVA for Q4 is very much on expected lines with muted agriculture growth amidst weather related disruptions. Manufacturing sector GVA has recorded healthy growth supported by lower input cost, while robustness seen in the services sector has continued,” Ms. Sinha added.

Growth rates in nominal GVA and nominal GDP for Q4 of FY24 have been estimated at 8.0% and 9.9%, respectively, the NSO said.

Real GDP, or GDP at constant prices, is estimated to have attained a level of ₹173.82 lakh crore in FY24, against the First Revised Estimates (FRE) of GDP for FY23 of ₹160.71 lakh crore, it added. Nominal GDP, or GDP at current prices, is estimated at ₹295.36 lakh crore in FY24, against ₹269.50 lakh crore in FY23, up 9.6%

Quarterly growth

Real GDP in Q4 is estimated at ₹47.24 lakh crore, against ₹43.84 lakh crore in Q4 of FY23, up 7.8%. Nominal GDP in Q4 is estimated at ₹78.28 lakh crore, against ₹71.23 lakh crore in Q4 of FY23, showing a growth rate of 9.9%.

Real GVA in Q4 is estimated at ₹42.23 lakh crore, against ₹39.74 lakh crore in the year-earlier period, showing a growth rate of 6.3%. Nominal GVA in Q4 is estimated at ₹70.97 lakh crore, against ₹65.74 lakh crore in Q4 of FY23, up 8%.

“On the expenditure side [of GDP], as expected, the growth has been mainly led by the government’s strong capex. Going forward, we expect GDP growth at around 7% for FY25,” CareEdge’s Ms. Sinha said.