India’s GDP experienced a notable increase in the January-March 2023 quarter, reaching a growth rate of 6.1% compared to 4.4% in the previous quarter. This positive development has contributed to an overall uptick in the country’s economy, with the estimated GDP growth for the fiscal year 2022-23 revised to 7.2% from the earlier projection of 7%. These figures are based on the provisional national income data released by the National Statistical Office (NSO) on May 31.
According to the data, the Gross Value Added (GVA) in the economy is believed to have increased by 7% in 2022-23, a decline from the 8.8% growth rate seen in the previous fiscal year. Notably, the growth rate of manufacturing GVA has fallen to 1.3% from 11.1% recorded a year ago.
The NSO had previously estimated India’s real GDP to grow at a rate of 7% for the fiscal year 2022-23, showing a slowdown compared to the 9.1% growth achieved in FY22. However, the recent uptick in GDP growth during the January-March 2023 quarter has provided some positive momentum.
Among the eight broad economic activity segments, three sectors experienced higher GVA growth in 2022-23 compared to the previous year. These sectors include Agriculture (4% growth compared to 3.5% in 2021-22), Financial, Real Estate and Professional Services (7.1% growth compared to 4.7% in 2021-22), and Trade, Hotels, Transport, Communication, and Services related to Broadcasting, which saw marginal improvement with a growth rate of 14%.
Meanwhile, the Construction sector, which is known for its employment-intensive nature, witnessed a growth rate of 10% in 2022-23, down from 14.8% in 2021-22. The growth rate of the Mining and Quarrying sector also slowed to 4.6% from 7.1%. The Electricity, Gas, Water Supply & Other Utility Services sector experienced a 9% growth rate, slightly slower than the 9.9% growth rate recorded in 2021-22. Additionally, the Public Administration, Defence, and Other Services sector witnessed a GVA growth rate of 7.2% in 2022-23, compared to 9.7% in the previous year.
The NSO has made revisions to the GDP and GVA numbers, lowering the figures for the first half of the fiscal year while slightly increasing the third quarter (Q3) figures. The GDP growth for Q1 of 2022-23 is now estimated at 13.1%, followed by a 6.2% rise in Q2 and 4.5% growth in Q3 (up from the previously estimated 4.4% in February).
Economists have noted that consumption remains sluggish, and the overall growth pattern remains uneven. Despite a slight improvement in private final consumption expenditure, which increased to 2.8% in Q4 from 2.2% in Q3, it remained subdued, contradicting the uplift in consumer sentiments indicated by the RBI’s consumer confidence survey, as highlighted by ICRA chief economist Aditi Nayar.