In the fourth quarter of FY23, India’s Gross Domestic Product (GDP) expanded by 6.1%, surpassing both analyst and Reserve Bank of India predictions. The growth was driven by increased government and private investments, although private consumption remained sluggish.
Despite the global economic slowdown, the Indian economy demonstrated a strong performance in the last quarter of FY23. The Reserve Bank of India (RBI) had anticipated a growth rate of 5.1 % for Q4FY23, while economists had predicted growth exceeding 5 % during the January-March period. These projections indicate that the Indian economy exceeded expectations during this period.
The GDP growth for the full fiscal year FY23 was adjusted to 7.2 %, surpassing the central bank’s earlier projection of 7 %.
Based on the available data, the agricultural sector experienced a growth of 10.3 %, while the mining sector witnessed an impressive growth rate of 16.3 %. Additionally, the construction sector demonstrated robust growth at 10.4 %.
In the March quarter, the manufacturing sector, which has historically contributed around 17% to the economy, experienced a YoY expansion of 4.5%. This growth follows a revised contraction of 1.4% in the preceding three months.
The forecast for normal monsoon season in the next four months could promote the farm sector, which grew 5.5% YoY in the March quarter compared with an upwardly revised 4.7% in the previous quarter.
Private consumption, representing nearly 60% of the economy, saw a YoY growth of 2.8% in the March quarter, surpassing the revised growth rate of 2.2% in the previous quarter. Meanwhile, capital formation, an indicator of investment, increased by 8.9% compared to a downwardly revised 8% in the same period.
India’s fiscal deficit for the financial year ending on March 31 reached Rs 17.3 lakh crore, which is nearly 99% of the revised annual estimate. The government also managed to meet the targeted fiscal deficit of 6.4% of the GDP, aided by increased tax revenue despite an increase in spending. The government’s statement highlighted that this accomplishment was achieved despite the rise in expenditures.
Sectors like auto, steel, and power consumption for April showed a pick-up in activity and sustained growth momentum.