India’s economy is expected to grow 7.3 per cent in the current fiscal year ending in March, the highest rate of the major global economies, helped by state spending and a pickup in manufacturing, the National Statistics Office said on Friday.
The first advance estimates of annual gross domestic product come after the Reserve Bank of India (RBI) raised its growth forecast last month to 7% from an earlier estimate of 6.5 per cent.
“These are early projections for 2023/24,” the National Statistical Office(NSO) said in a statement, noting that improved data coverage, actual tax receipts and spending on state subsidies would have a bearing on subsequent revisions.
India’s economy grew 7.2 per cent in 2022/23 and 8.7 per cent in 2021/22.
Manufacturing, which accounts for about 17 per cent of the GDP, is estimated to expand 6.5 per cent year-on-year in 2023/24, compared to 1.3 per cent a year ago, while construction output was seen growing by 10.7 per cent, up from 10 per cent in the previous year, data showed.
However, the growth in farm output, contributing about 15 per cent to GDP was seen slowing down to 1.8 per cent in the current fiscal year, from 4 per cent in the previous year, impacting rural wages.
India posted faster-than-expected economic growth of 7.6 per cent year-on-year in the September quarter, after growing 7.8 per cent in the previous quarter, which prompted many private economists to upwardly revise their yearly estimates.
Among others, S&P Global Ratings expects India will remain the fastest-growing major economy for the next three years, setting to become the world’s third-largest economy by 2030, overtaking Japan and Germany.
Finance Minister Nirmala Sitharaman will present an interim annual budget on February 1 and is expected to increase spending on infrastructure, helped by rising tax receipts while aiming to lower fiscal deficit from 5.9 per cent of GDP in the current fiscal year.
