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∙ India’s real GDP growth in 2023-24 is estimated at 7.3%, compared to 7.2% a year ago, as per the NSO.
Key highlights of the NSO estimates
∙ GVA growth for the farm sector is estimated to more than halve from 4% a year ago to 1.8% this year, as is the case for Trade, Hotels, Transport, Communication and Services whose GVA uptick is estimated to moderate to 6.3% from 14% in 2022-23.
∙ The share of private final consumption expenditure in GDP is expected to drop this year to the lowest in at least three years at 56.9% from 58.5% in 2022-23.
∙ The investment rate is likely to pick up to nearly 30% of GDP, driven by government capex, higher consumption growth is vital for private investments to take on the onus of spurring the economy.
∙ Manufacturing GVA growth is estimated to accelerate to 6.5% in 2023-24 from just 1.3% a year earlier, while mining GVA is expected to rise 8.1%, from 4.6% in 2022-23.
∙ Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of 171.79 lakh crore, as against the Provisional Estimate of GDP for the year 2022-23 of ₹160.06 lakh crore, released on 31st May, 2023.
India’s GDP Growth
∙ India’s economic growth story has been impressive, with its nominal GDP reaching an estimated $3.5 trillion in 2024 and $7.3 trillion by 2030(IMF).
∙ However, maintaining this high growth trajectory faces several challenges, demanding proactive measures.
Challenges
∙ Global headwinds: Slowing global growth, rising interest rates, and geopolitical tensions can dampen foreign investment and trade, impacting India’s export-oriented sectors.
∙ Domestic impediments: Infrastructure bottlenecks, bureaucratic hurdles, and skill shortages hinder efficient production and investment.
∙ Rural distress and uneven growth: Low agricultural income and slow job creation in rural areas lead to lower aggregate demand and hamper overall economic expansion.
∙ Financial sector woes: Stressed assets in the banking system limit credit availability for businesses and individuals, affecting investment and consumption.
∙ Environmental concerns: Balancing economic growth with environmental sustainability requires addressing rising pollution levels and ensuring responsible resource utilization.
Measures
∙ Boosting infrastructure investment: Investing in railways, highways, ports, and digital infrastructure improves connectivity, reduces logistics costs, and attracts investment.
∙ Ease of doing business: Streamlining regulatory processes, reducing bureaucratic red tape, and improving transparency incentivize investment and boost private sector participation.
∙ Skill development and education: Prioritizing education, skilling initiatives, and vocational training equips the workforce with relevant skills to meet industry demands and drive productivity.
∙ Revitalizing agriculture: Improving irrigation facilities, providing technical assistance, and fostering agritech innovation can enhance agricultural productivity and income for farmers.
∙ Financial sector reforms: Strengthening banks, resolving bad loans, and promoting financial inclusion improve credit flow and support economic growth.
Way Forward
∙ Addressing challenges and implementing effective measures are crucial for sustaining India’s high GDP growth.
∙ Focusing on inclusive growth, environmental sustainability, and creating a conducive environment for domestic and foreign investment are key drivers of future economic prosperity.
