India has set its Gross Domestic Product (GDP) growth rate at 8.4% during the last quarter of 2023, which is higher than the expectations of economic experts. As a result, India is being recognized as having one of the best-performing economies in the world.
According to experts at Jefferies, by 2027, India could become the third-largest economy globally. Currently, it holds the fifth position.
This robust GDP growth rate is remarkable for the economy, especially considering that during this three-month period (from October to December), there were expectations of reduced growth due to government spending cuts and a decline in industrial production, along with the impact of monsoon rains.
The announcement of this rapid growth comes a few weeks before the elections, and it highlights the increase in production in manufacturing and construction sectors.
This high growth rate has come at a time when countries like China, Japan, Germany, and the United Kingdom are still struggling to recover from the devastating economic impacts of COVID-19.
The opposition party Congress claims that this impressive growth rate is based on manipulated figures, while the country’s economy is still under pressure.
After the data showing an eight-point-four percent growth rate in the last quarter, the estimates for economic growth in the current fiscal year have also been revised upwards. According to the new estimates, the economy is expected to grow at seven-point-six percent in 2023-24. Previously, this estimate was seven-point-three percent.
What is the reason for the boom in the Indian economy?
The question is asking about the reason for the rapid growth in the Indian economy. The data on the economy was released a month before the parliamentary elections, which is quite pleasing for Prime Minister Modi. Narendra Modi expressed his happiness over the high rate data as soon as it arrived and wrote in his message, ‘The GDP growth rate of 8.4 percent is a testament to the strength of the Indian economy and the potential for improvement in it. We will continue our efforts for rapid economic progress so that 1.4 billion Indians can live a better life and the dream of making the country a developed country can be achieved.’
The country’s Chief Economic Advisor Anant Nagishwaran told reporters that the economy is consistently delivering better results than all expectations. However, he said that while the GDP growth rate is high and strong and the prospects for its promotion in the future are looking better, many foreign factors can push it down.
The increase in GDP is a surprise for everyone because experts were expecting that the economy would fall to 6.5 percent in the last quarter compared to the previous one.
The Reserve Bank of India itself had estimated a rate of 6.5 percent. Anchal Magazine, an analyst for the Indian Express, wrote in an analysis that several changes have been made to the old data in the statistics released on Thursday. According to them, ‘A major change has been made that the total domestic production of the past fiscal year, which was 7.2 percent, has now been reduced to seven percent. The benefit of this will be that a part of the previous year will also be added in the current fiscal year, which will make the GDP rate look better this year.’
Anchal says that the GDP growth rate in the first quarter of the current fiscal year was 7.8, now it has been increased to 8.2. Similarly, in the new data, the rate of 7.6 percent in the second quarter has been increased to 8.1. Economists say that the way the growth rate of the current fiscal year has been increased by revising it, it threatens to bring down the estimate of 6.7 percent for the fiscal year 2025.
However, many analysts do not agree with this. An economic analyst told the media on condition of not revealing his identity that he is not surprised at the figures of 8.4 percent. ‘During Covid, when the world’s economy was badly shaken and has not yet recovered, even then India’s economy performed slightly better. And now it is gradually coming back on its original path. It will progress more rapidly in the coming days.’