India’s Economic Resilience: Unpacking the 7.3% GDP Growth in 2023-24

In a positive turn of events, India’s economic landscape is showcasing robust growth, with the first advance estimates of the National Statistical Office (NSO) projecting a 7.3% real GDP growth for the fiscal year 2023-24. This figure, a slight improvement from the previous year’s 7.2%, has garnered praise from economists and experts alike. In this blog post, we will delve into the factors driving this growth, assess the concerns raised by economists, and explore the implications for India’s economic future.

Economic Growth Drivers

Economists are lauding the growth, attributing it to the stellar performance of the manufacturing and construction sectors. According to Dharmakirti Joshi, Chief Economist at CRISIL Ltd., the momentum in non-agriculture, particularly in the industry and construction sectors, has offset the slowdown in agriculture. Private investments have emerged as a crucial pillar for this growth, emphasizing the need for a more widespread revival in consumption demand, particularly in the informal sector and rural areas.

The Outlook and Adjustments

The NSO’s outlook aligns with the Reserve Bank of India’s (RBI) adjustment of its growth forecast, upgrading it to 7%, reflecting the strength of the manufacturing and construction sectors. However, concerns have been raised regarding the projected growth for the second half of the fiscal year. Experts suggest that the assumed growth might be overly optimistic, given the challenges faced by the agriculture and construction sectors, along with a potential slowdown in capital expenditure ahead of the General Elections.

Diving Deeper into Estimates

The NSO’s advance estimates indicate a nominal GDP growth of 8.9% for FY2024, a sharp decline from the 16.1% seen in the previous fiscal year. The deceleration is largely attributed to the turnaround in the Wholesale Price Index (WPI) from inflation to deflation. This shift has implications for the government’s fiscal deficit target, raising questions about its potential impact on the economy.

Sectoral Insights

Rajani Sinha, Chief Economist at CareEdge Ratings, emphasizes the strong growth in the manufacturing and construction sectors but expresses concern over the weak consumption growth at 4.4%. This sluggish pace is noted as the slowest in the past two decades, excluding the pandemic year of FY21. Investment growth, at 10.3%, has been driven by substantial capital expenditure by the government, but sustaining this momentum requires a boost in consumption.

Industry Perspectives

Sanjeev Agrawal, President of PHD Chamber of Commerce and Industry, remains optimistic about the GDP growth, praising the manufacturing sector’s growth at over 6%. He highlights ongoing reforms and the steady growth in mining, quarrying, and the construction sector, indicating stronger economic prospects in the coming years. Agrawal emphasizes the need for reducing the cost of doing business and enhancing the ease of doing business to stimulate further growth.

Expert Opinions and Concerns

Dharmakirti Joshi from CRISIL Ltd. expresses caution, stating that the assumed growth for H2 FY2024 might be too high. Factors such as a weak agricultural outlook, declining government capital expenditure, and a potentially high estimation for the services sector growth are among the concerns raised. Nish Bhatt, Founder & CEO of Millwood Kane International, echoes the sentiment, emphasizing the impact of high-interest rates and slowing global growth on India’s economic pace.

Looking Ahead

Despite global challenges, including geopolitical tensions and disruptions in the supply chain, the Indian economy remains resilient. The upward adjustment in growth forecasts and the impressive performance of key sectors indicate that India continues to be the fastest-growing major economy. However, addressing concerns around consumption growth, sustaining investment momentum, and navigating global uncertainties will be critical for India’s economic trajectory in the years ahead.


In conclusion, India’s economic resilience is evident in the estimated 7.3% GDP growth for the fiscal year 2023-24. While the manufacturing and construction sectors lead the charge, concerns linger around weak consumption growth and potential challenges in specific sectors. Navigating these challenges, implementing further reforms, and fostering a conducive business environment will be pivotal for India to maintain its growth trajectory in the global economic landscape.

Leave a Comment