The Indian economy has shown remarkable resilience, recording a significant growth rate of 7.6 per cent during the July-September quarter of the fiscal year 2023-24 (Q2FY24). This data, released by the Ministry of Statistics and Programme Implementation, reaffirms India’s position as the fastest-growing major economy globally. The surge in GDP is attributed to robust performances in manufacturing, mining, construction, and government spending.
Prime Minister Narendra Modi emphasized the country’s economic strength amid global challenges. He stressed the commitment to foster rapid growth, eradicate poverty, and enhance the quality of life for citizens.
Key Takeaways from India’s Q2 FY24 GDP Growth:
- Q2 Nominal GDP Surge: The estimated Nominal GDP in Q2FY24 stands at ₹71.66 lakh crore, showcasing a 9.1 per cent growth from the previous year, albeit a tad slower than the earlier quarter.
- Surpassing RBI Projections: The Q2 GDP growth outpaced both market and Reserve Bank of India (RBI) projections. RBI’s earlier estimates for 2023-24 indicated a real GDP growth of 6.5 per cent for Q2, 6.0 per cent for Q3, and 5.7 per cent for Q4.
- Sectoral Contribution: Manufacturing expanded by 13.9 per cent, mining by 10 per cent, and construction by 13.3 per cent year-on-year, contributing significantly to the GDP growth.
- Government Spending Surge: Government expenditure soared by 12.4 per cent in the September quarter, marking a substantial increase from the previous term. However, private consumption growth witnessed a surprising slowdown.
- Economic Outlook: Chief Economic Advisor V Anantha Nageswaran asserted that India might be underestimating its GDP growth, affirming a forecast of 6.5 per cent for FY24.
Economists anticipate a potentially hawkish stance from the RBI in its upcoming monetary policy committee announcement, given the GDP growth rate surpassing expectations. There’s an inclination towards a service-to-goods economic shift, indicating a positive bias in the forecast.
Sakshi Gupta, Principal Economist at HDFC Bank, Gurugram, expects the RBI to maintain a vigilant approach owing to the robust growth trajectory and persistent inflation risks.