Effects of economic reforms visible, H1 FY2023-24 GDP grows at 7.7%

India has exhibited remarkable strength and resilience in the post-COVID era, with the Gross Domestic Product (GDP) witnessing an annual growth rate exceeding 7% over the past two financial years (2021-22 and 2022-23). As per Q1 and Q2 of FY 2023-24 estimates provided by the Ministry of Statistics and Programme Implementation, this positive trajectory has persisted into the current fiscal year too, with GDP growth remaining above 7% in both the first and second quarters. The Q1 2023-24 grew at 7.8% and Q2 2023-24 grew at 7.6% making an average growth rate of 7.7% in H1 or First Half of the FY 2023-24.

This consistent economic performance underscores India’s ability to rebound effectively from the challenges posed by the pandemic covid and geopolitical conflicts, positioning the Nation as a robust player in the global economic landscape. The mitigating strategies of the Government to tackle the impact of geopolitical conflict are appreciable as growth is going up and inflation is coming down. Inflation trajectory has come significantly down to 4.8% in October 2023 from its recent peak of 7.4% in July 2023.

GDP Growth and its Components India has experienced a commendable growth trajectory characterized by an expanding Gross Domestic Product (GDP). The sectors contributing significantly to this growth include Mining and quarrying, Manufacturing, Public Administration, Defense and other Services, Electricity, Gas, Water Supply and other Utility Services, and Construction. These sectors have emerged as key contributors, playing pivotal roles in shaping and bolstering India’s economic advancement. This observation underscores the diverse and multifaceted nature of India’s economic landscape, highlighting the strategic importance of various sectors in driving the Nation’s overall economic growth.

Growth of GVA so far

Continued momentum in the growth of GDP is encouraging as broad-based growth across the sectors supports the economy to grow from strength to strength. The high growth of Manufacturing at 13.9% followed by Construction at 13.3%, Electricity, Gas, Water Supply, and other Utility Services at 10.1%, and the Mining & Quarrying sector growing at 10% are inspiring and indicate that economic activity is continuing on the high road. It is appreciable that despite the global headwinds, the economy continues to grow consistently. The continued high momentum of Gross Fixed Capital Formation at 35.3% of GDP is indicative of continuous expansion in the CAPEX in the coming quarters. India is emerging as a beacon of economic resilience, and continues to be a bright spot in the global economic landscape.

India’s decadal growth trajectory

India’s economic trajectory has exhibited encouraging trends, marked by a robust growth trajectory. In the aftermath of the global pandemic, India’s Gross Domestic Product (GDP) has consistently surpassed the 7% mark, reflecting resilience and recovery in the country’s economy. These positive indicators underscore India’s ability to navigate challenges and demonstrate sustained economic progress in the coming times.

Going ahead, continued process of economic reforms will further strengthen the economic fundamentals of the country to maintain strong economic growth trajectory. Strengthening of India’s connectivity with Global Value Chains (GVCs) will enhance India’s interestedness with global economy. Strong supply chains will help further reduce costs of doing business and more price competitiveness in the domestic and international markets. Enhanced competitiveness of the economy will attract more and more domestic and foreign investments and help to create more employment opportunities in the factories with expanded production possibility frontiers.

In conclusions, India is poised to achieve significant economic milestones in the coming years, with a projected GDP of more than USD 4 trillion in FY 2024-25. Bolstered by comprehensive reforms, the Nation has garnered global acclaim for its robust economic fundamentals and notable improvements in the ease of doing business. According to a recent S&P report, India is anticipated to surpass Japan, emerging as the second-largest economy in the Asia-Pacific region, with a projected GDP of USD 7.3 trillion by 2030. The optimistic outlook is further accentuated by the growing enthusiasm among businesses to expand their production possibility frontiers and deploy more workforce in their respective factories. As India continues on this trajectory, it is evident that the Nation is moving steadfastly on the right path towards becoming a formidable economic force on the global stage and a developed economy by 2047.