In a major boost to the country's economy, India registered a stellar 8.2% GDP growth in Financial Year 2023-24, according to the official data released on Friday by the Ministry of Statistics. The massive growth became possible because of an impressive 7.8% GDP growth in the January-March quarter (Q4).
8.2% growth marks a significant increase from the 7% growth observed in FY 2022-23, as per the official data.
This high growth rate has been primarily driven by robust performances in the manufacturing and mining sectors. The manufacturing sector witnessed a remarkable turnaround with a 9.9 percent growth in 2023-24, up from a contraction of -2.2 percent in the previous fiscal year. Similarly, the mining sector grew by 7.1 percent, a substantial increase from the 1.9 percent growth recorded in 2022-23.
The manufacturing sector’s expansion is crucial for providing quality employment to the increasing number of young graduates from the country’s engineering institutes and colleges. The government has introduced various incentives to boost the production of smartphones, electronic goods, drones, and semiconductors. These measures are part of a broader strategy to position India as a viable alternative supply chain hub amidst the geopolitical isolation of China.
These initiatives have also spurred an increase in high-value exports. Under the leadership of Prime Minister Narendra Modi, the government has significantly increased spending on large infrastructure projects in sectors such as highways, railways, and ports. This investment has generated numerous jobs, leading to a multiplier effect that has bolstered demand for goods and services and further stimulated economic growth.
India continues to hold its position as the fastest-growing major economy in the world, outpacing China, which reported a 5.3 percent economic growth in the first quarter of 2024, and European countries that narrowly avoided a recession.
The National Statistical Office (NSO), in its second advance estimate of national accounts, had predicted the country’s growth at 7.7 percent for 2023-24.
The government’s fiscal deficit for 2023-24 stood at 5.63 percent of GDP, slightly better than the 5.8 percent estimated in the Union Budget. In absolute terms, the fiscal deficit was Rs 16.53 lakh crore, compared to the projected Rs 17.34 lakh crore (5.8 percent of GDP) in the interim Budget presented on February 1.
The government successfully met its revenue collection target, with net tax collection reaching Rs 23.26 lakh crore in FY24, while total expenditure was Rs 44.42 lakh crore, according to data from the Controller General of Accounts.
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