India Projects 7.3 Percent Economic Growth in Current Fiscal Year, Foresees Promising Manufacturing and State Spending

India Projects 7.3 Percent Economic Growth in Current Fiscal Year, Foresees Promising Manufacturing and State Spending

VoM News Desk | January 5, 2024 | 07:12 PM IST | Breaking News | Follow on Google News

India Projects 7.3 Percent Economic Growth in Current Fiscal Year, Foresees Promising Manufacturing and State Spending

India Projects 7.3 Percent Economic Growth in Current Fiscal Year, Foresees Promising Manufacturing and State Spending

The National Statistics Office (NSO) recently released the initial projections for India’s gross domestic product (GDP), foreseeing a growth rate of 7.3% for the ongoing fiscal year ending in March. This optimistic forecast, the highest among major global economies, attributes this growth to robust state expenditures and an uptick in manufacturing activities.

This estimation aligns with the Reserve Bank of India’s (RBI) upgraded growth projection, now standing at 7% compared to the earlier estimate of 6.5%. However, the NSO emphasized that these projections remain preliminary, suggesting that subsequent revisions may occur as more accurate data on tax revenues, subsidies, and improved data coverage become available.

The economy exhibited a 7.2% growth in the preceding fiscal year 2022/23 and an impressive 8.7% in 2021/22. Manufacturing, constituting approximately 17% of the GDP, is anticipated to surge by 6.5% year-on-year in the current fiscal year, a substantial increase from the 1.3% recorded a year ago. Similarly, the construction sector is projected to witness a growth of 10.7%, up from 10% in the previous year.

Contrarily, agricultural output, contributing around 15% to the GDP, is expected to decelerate to 1.8% in the ongoing fiscal year, down from 4% in the preceding year. This slowdown could potentially impact rural wages due to its impact on farm output.

India’s stronger-than-expected economic expansion of 7.6% year-on-year in the September quarter, coupled with consecutive quarters of significant growth, led numerous private economists to revise their annual growth estimates upward. Additionally, projections from S&P Global Ratings suggest India is poised to maintain its status as the fastest-growing major economy globally for the next three years, eyeing to surpass Japan and Germany, thereby securing the position of the world’s third-largest economy by 2030.

Finance Minister Nirmala Sitharaman is slated to present an interim annual budget on February 1. The budget is expected to prioritize increased infrastructure spending supported by augmented tax revenues, while concurrently aiming to reduce the fiscal deficit from the current 5.9% of the GDP.

VoM News Desk

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