AYODHYA, INDIA – DECEMBER 30: Prime Minister Narendra Modi during the road show at Rampath on December 30, 2023 in Ayodhya, India. Ahead of the dedication ceremony of the Ram Lalla temple in Ayodhya next month, Prime Minister Narendra Modi arrived in the temple city today, December 30, and inaugurated several projects worth a total of Rs 15,000 crore for Ayodhya. The projects include developments such as the airport, railway station, highways and doubling of the railway line. (Photo by Deepak Gupta/Hindustan Times via Getty Images)
Hindustan Times | Hindustan Times | Getty Images
India expects annual growth of 7.3% in the fiscal year ending in March, the highest rate among any major global economy, providing a boost to Prime Minister Narendra Modi ahead of national elections scheduled before May.
“These are early forecasts for 2023-24,” the National Statistical Office (NSO) said in a statement on Friday, adding that improved data coverage, actual tax revenues and government support spending may influence later revisions.
The first advance estimates for annual GDP follow last month's forecast increase from the Reserve Bank of India (RBI) to 7%, up from the previous estimate of 6.5%.
Analysts said that growth exceeding 7% for the third year in a row in the context of the global slowdown will help Modi win a third term to rule the third largest economy in Asia.
“This growth comes at a time when global conditions remain weak and is due to how the government is managing the economy,” said Rahul Bajoria, economist at Barclays Investment Bank.
Standard & Poor's ratings agency expects India to remain the fastest growing major economy over the next three years, putting it on track to become the world's third-largest economy by 2030, overtaking Japan and Germany.
The Indian economy grew by 7.2% in 2022/23 and 8.7% in 2021/22.
Finance Minister Nirmala Sitharaman is scheduled to present an interim annual budget in February. Infrastructure spending is expected to increase, supported by higher tax revenues, while aiming to reduce the fiscal deficit from 5.9% of GDP in the current fiscal year.
Government spending is expected to rise by about 4% year-on-year in 2023/24 compared to a 0.1% increase in the previous fiscal year, while private investment will rise by 10.3%, less than the 11.4% rise in the previous year. ., the data displayed.
Private consumption, which accounts for nearly 58% of GDP, expanded by 4.4% year-on-year compared to 7.5% in the previous fiscal year.
Modi has taken steps to attract global companies, including Apple and Japanese companies, to set up factories in India, while increasing spending to build roads, ports and airports.
Manufacturing, which accounts for about 17% of GDP, is expected to grow by 6.5% year-on-year in 2023/24, compared to 1.3% a year ago, while construction production is expected to grow by 10.7%, up from 10%. In 2020. Last year, the data showed.
India recorded faster-than-expected economic growth of 7.6% year-on-year in the September quarter, after growth of 7.8% in the previous quarter, which prompted many private sector economists to revise their annual estimates upward.
Many economists feel that India's growth has been fueled by sectors, including information technology and financial services, that create only limited employment opportunities and do not help the poor in rural areas.
Growth in agricultural production, which contributes about 15% of GDP and employs more than 40% of the workforce, is expected to slow to 1.8% in the current fiscal year, from 4% a year ago.
The average per capita income in the South Asian country with a population of more than 1.4 billion people is still around $2,500, less than a quarter of that of China.
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