Despite significant global pressures and geopolitical instability, India’s economy demonstrated resilience by posting a 6.1% growth rate in the final quarter of the previous fiscal year. Furthermore, the economy is predicted to expand by 7.2% in the 2022-23 financial year, according to government figures released Wednesday. The data signifies that the nation’s economic performance exceeded forecasts.
The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) reported that India’s GDP, at constant (2011-12) prices, for Q4 2022-23 is estimated at Rs. 43.62 lakh crore, up from Rs. 41.12 lakh crore in Q4 2021-22, reflecting a 6.1% growth. At current prices, GDP for Q4 2022-23 is estimated at Rs. 71.82 lakh crore, marking a 10.4% growth compared to Rs. 65.05 lakh crore in Q4 2021-22.MoSPI expects India’s real GDP to reach Rs. 160.06 lakh crore in 2022-23, up from the revised estimates of Rs. 149.26 lakh crore for 2021-22, translating to a 7.2% growth, lower than the 9.1% growth in 2021-22. The Nominal GDP in 2022-23 is expected to reach Rs. 272.41 lakh crore, up from Rs. 234.71 lakh crore in 2021-22, reflecting a 16.1% growth rate.
The impressive Q4 growth came as a pleasant surprise to economists. Dharmakirti Joshi, Chief Economist at CRISIL, said the GDP expansion in Q4 FY2023 was significantly higher than expected, pointing to an encouragingly strong economic momentum.
Agricultural growth showed an unexpected increase of 5.5% despite the unseasonal rains in the January-March period, largely driven by the industrial sector, said Aditi Nayar, Chief Economist at ICRA Ratings.
Meanwhile, the construction segment witnessed a robust 10.4% growth in Q4 FY2023, surpassing the performance of other GVA sub-sectors. However, growth in private final consumption expenditure remained relatively subdued, slightly increasing to 2.8% in Q4 from 2.2% in Q3.
Looking ahead, Joshi predicts a slowdown to 6% in fiscal 2023-24 due to impacts on exports from global deceleration and effects of interest rate hikes on interest-sensitive segments. Despite this, India is projected to be the fastest growing G-20 economy this fiscal year. On the other hand, Nayar projects a growth of real GDP in FY2024 at 6.0%, with a downside risk of up to 50 basis points if El Nino disrupts monsoon rains. Nonetheless, the accelerated capex by the Government and states and rapid execution of infrastructure projects could provide a boost to GDP estimates for FY24.
In other news, India’s eight core sectors grew moderately by 3.5% year-on-year in April 2023. The growth was hindered by a decline in the output of crude oil, natural gas, refinery products, and electricity.
The combined Index of Eight Core Industries (ICI), which measure the expansion of these sectors, reported a 7.7% growth rate during 2022-23 compared to the corresponding period of the previous year, as per provisional data from the Ministry of Commerce and Industry. While crude oil production, natural gas production, petroleum refinery production, and electricity generation all saw declines in April 2023, coal production, fertilisers production, steel production, and cement production all recorded an increase.
