Inclusive Growth
India's economic growth, celebrated in aggregate terms, hides an uncomfortable truth: much of this progress has bypassed the majority of the population, particularly in rural areas.
India’s GDP grew at the rate of 7.8 per cent during the April-June quarter of the current financial year 2023-24, according to the National Statistical Office (NSO) data released on Thursday. The economy registered an upward growth as compared to the previous quarter when the country registered 6.1 per cent growth. However, the growth rate of Q1 in the financial year 2023-2024 was slower than the growth rate of Q1 in 2022-2023.
With a growth rate of 7.8 per cent, India continued to be the fastest-growing major economy in the world as China’s GDP registered 6.3 per cent growth during the same April-June quarter of the current financial year.
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The agriculture sector in the country, according to government data, witnessed an increase from 2.4 per cent in the Q1 of the previous financial year to 3.5 per cent in April-June. In the manufacturing sector, the country slowed down to 4.7 per cent in the first quarter of the current fiscal year as compared to 6.1 per cent during the same period in the previous year.
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Q1 growth rate in line with estimates
The growth rate of 7.8 per cent in Q1 is in line with the estimates of economists. According to experts, strong domestic demand, government capital expenditure, and a growing private investment were the factors that supported growth in Q1 of FY 24.
Meanwhile, the State Bank of India’s latest projection has estimated India’s overall GDP to grow at 7.2 per cent in the current financial year FY24. The International Monetary Fund (IMF) has also revised India’s economic growth in FY24 to 6.9 per cent from its earlier estimate of 7.2 per cent.
While the growth in the first quarter remained in line with the estimates, the economy is likely to witness headwinds in the second half of the current fiscal year. According to rating agency ICRA, factors such as erratic rainfall, narrowing differentials with year-ago commodity prices, and a possible slowdown in the momentum of government capex will hamper the growth momentum.
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