India’s GDP Growth: an analysis of 2023-24 Q1 | Business Upturn

India’s GDP Growth: an analysis of 2023-24 Q1

An analysis of India’s GDP growth in the first quarter of 2023-24

According to a recent survey of economists conducted by, the Indian economy is likely to have grown at 7.8% in the April-June 2023 quarter. The GDP growth is largely expected to have been driven by strong domestic demand, government investments, and a tentative recovery in private investment.

In the 75th year of Independence, India has already become the world’s fifth largest economy and will reach the $3.5 trillion mark by end-March, said the Economic Survey tabled in Parliament on Tuesday. In real terms, the economy is expected to grow at 7 per cent for the year ending March 2023.

India’s GDP growth is likely to show double-digit growth; consumer spending and low base are expected to accelerate economic growth. Data shows that the Index of Industrial Production (IIP), automobile sales, exports, fuel consumption, core imports, and railway freight cargo have been growing in double-digits so far this fiscal, indicating a sharp rebound in growth.

Heavy Industries Minister Mahendra Nath Pandey urged the domestic industry to work in the direction of increasing the manufacturing sector’s share in the country’s GDP. Share of manufacturing in GDP should be increased to 20-25 per cent, he said at an Assocham webinar. Manufacturing sector’s share in India’s GDP is estimated at around 17 per cent currently.

High-frequency indicators suggest higher resilience in the industrial sector compared with services, which bore the brunt of lockdowns. During the first wave, too, the industry was relatively less hurt because of better adaptability, fewer curbs versus services, and uptick in exports. In the rural areas, while the pandemic spread rapidly, policy support to non-agricultural incomes was less compared with last fiscal. But the bumper rabi harvest would have cushioned agriculture incomes.

India’s outbound shipments rose 49.85% on year to a record $35.43 billion in July, aided by growth in exports of petroleum products and gems and jewellery. Consumption of daily groceries and essentials in villages outpaced cities in July, reversing the trend of June. Urban growth was higher than in rural areas for the first time in nearly two years in June. With the Covid situation improving and good monsoon rain, rural growth is expected to bounce back and be in line with urban growth going forward.

The aggregate demand in the economy is `limping back’ but a catch-up to the pre-pandemic level will take some more time, the Reserve Bank of India said earlier in its assessment of the economy. India Ratings and Research revised downward its economic growth forecast for India to 9.4% for FY22 from 9.6% estimated earlier as it does not see the entire adult population getting vaccinated by December 31 despite a strong recovery after the second Covid-19 wave.

India’s Wholesale Price Index in July 2021 eases to 11.16 per cent YoY as it finally falls below 12 per cent after seeing a record high in May. The high rate of inflation is because of the low base effect and soaring prices of crude oil and manufactured goods.

It seems that India’s economy is showing signs of recovery and growth despite challenges posed by the pandemic.