GDP data shows Indian economy moving at faster pace, says experts

GDP data released on Wednesday clearly indicates that the Indian economy is moving at a faster clip from the March quarters onwards, with sectors like manufacturing and agriculture pushing the overall economic activities, according to industry associations and experts.

The economy grew by 6.1 per cent in the March quarter of 2022-23, pushing the annual growth rate to 7.2 per cent. The growth has propelled the country's economy to USD 3.3 trillion, setting the stage for achieving the USD 5 trillion target in the next few years.

In 2021-22, the economy grew by 9.1 per cent.

"Looking into the fine print of the GDP data for 2022-23, a clear signal is available that the Indian economy has moved at a faster clip from the fourth quarter of FY23 in key sectors like manufacturing, construction and financial services," industry body Assocham's Secretary General Deepak Sood said.

Going forward, he said the momentum is likely to continue given softening of raw material prices, including crude oil, and peaking of interest rates.

The Gross Value Added (GVA) growth in the manufacturing sector accelerated to 4.5 per cent in the March quarter as against 0.6 per cent a year ago.

GVA growth in mining sector was 4.3 per cent in the fourth quarter compared to 2.3 per cent in the same quarter of the previous fiscal. Construction sector grew 10.4 per cent in the March quarter, up from 4.9 per cent in the corresponding period of 2021-22.

The agriculture sector growth accelerated to 5.5 per cent from 4.1 per cent.

Saket Dalmia, President of industry body PHD Chamber of Commerce and Industry, said the growth of gross fixed capital formation at 34 per cent of GDP at constant prices is highly inspiring and indicate an expanded capex in the economy with strong possibilities of employment creation.

Sashi Shiv Ramkrishna, Senior Adjunct Professor at NMIMS, Bangalore said India's growth at 6.1 per cent in fourth quarter of the last fiscal is certainly positive news.

Accompanied by a possible interest rate cut by RBI could put India back on a higher growth trajectory although global factors do pose significant challenges, Ramkrishna said.

GDP at Constant (2011-12) Prices in Q4 2022-23 is estimated at Rs 43.62 lakh crore against Rs 41.12 lakh crore in Q4 2021-22, showing a growth of 6.1 per cent, as per the official data.

Aditi Nayar, Chief Economist at rating agency Icra, said GDP expansion in Q4 FY2023 was appreciably higher than expected while remaining uneven and confirming the hopes of a sequential pickup in the pace of growth of economic activity to 6.1 per cent from the bottom of 4.5 per cent seen in Q3 FY2023.

Icra has projected growth of real GDP in FY24 at 6 per cent, with a downside risk of up to 50 basis points in the event that an El Nino affects the monsoon rains.