According to NSO, India’s GDP growth for FY24 under the second advance estimates is 7.6% higher than 7.0% (revision from last year), with nominal growth being 9.1%.
A major boost has come from net taxes which pushes up India’s GDP growth to this level in FY24. GVA growth was 6.9%.
Sectors Contribution in India’s GDP Growth for FY24
Across sectors, with the exception of agriculture (0.7%), all segments have witnessed robust growth with manufacturing benefiting from negative base effect. Trade, transport etc. segment has the lowest growth rate of 6.5% which is more due to the high base effect of 12% growth witnessed last year. The pent up demand did surface in this sector in FY24.
A big boost has come from construction which has been supported all through by high thrust on roads and housing. The steel and cement data for the year have been robust all through.
A big positive here has been the sharp rise in the gross fixed capital formation rate to 31.3% from 30.7%. this can be attributed more to government capex, roads, housing as there is less anecdotal evidence of private sector picking up sharply.
Consumption to GDP ratio has slowed down marginally this year by 0.6% which can be the inflation impact.
Nominal GDP for Fy24 has been placed at Rs 293.89 lakh crore as against Rs 296.57 lkh cr in the budget. Assuming 10.5% growth for FY25 as per budget the GDP would be lower at Rs 324.48 lkh cr thus pushing up fiscal deficit ratio to 5.2% under ceteris paribus conditions.
Q3 story
Q3 has been propped up mainly by the net tax effect as value added has grown at 6.5% this quarter while GDP is at 8.4% due to exceptional tax collections and control over subsidies. This would get corrected in Q4 to lead to more modest growth for full year as seen in the data.
The other factor working in favour was the lower base effect with growth of just 4.8% in GVA last year and a negative carry on taxes taking growth in real GDP to 4.3%.
There was a fall in agricultural production by 0.8%.
Similar trends seen in the year was seen for Q3 with manufacturing benefiting from negative base effect as well as good corporate performance.
Construction growth, electricity and mining were the leaders along with finance and real estate, public administration.
GFCF too was up to 29.4% from 28.8%.
On the whole these are good tidings for the economy.