India’s economy is expected to grow 7.0% in the current financial year, according to the first advance estimates by the National Statistical Office (NSO) released on Friday. With this the country is set to lose the fastest-growing major economy tag. New Delhi had pegged India’s growth at 8.7% in the last fiscal year that ended March 31, 2022.
The projections are much lower than government’s earlier forecast of 8-8.5 per cent growth but above the Reserve Bank’s projection of 6.8 per cent. If the forecast comes true, India’s GDP growth will be lower than Saudi Arabia’s expected 7.6 per cent expansion. In fact, India’s GDP growth in the July-September quarter at 6.3 per cent was lower than the 8.7 per cent of Saudi Arabia.
Earlier last month, the Reserve Bank of India had lowered the country’s GDP (gross domestic product) growth forecast to 6.8 per cent for the current fiscal from 7 per cent earlier, on account of continued geopolitical tensions and tightening of global financial conditions.
The RBI had projected the real GDP growth for 2022-23 at 6.8 per cent, with the third quarter at 4.4 per cent and the fourth at 4.2 per cent. It had pared the growth projection for 2022-23 for the third time in December 2022.
Private final consumption expenditure, a measure of demand, is projected to rise 7.7% in FY23 from a year ago. Gross fixed capital formation, a measure of investment, is estimated to rise around 11.5% in FY23.
The share of private consumption in GDP is expected to rise to 57.2% in FY23 from 56.9% in FY22 and 57.3% in FY21. Per capita gross national income in real terms is estimated to be ₹1,11,807 crore in FY23, higher than ₹1,05,955 crore in FY22 and ₹98,629 crore in FY21.
Agriculture is expected to grow 3.5% in FY23 after growing 3% in FY22. Mining & quarrying is likely to see a reduction in growth at 2.4% in FY23 after growing at around 11.5% in FY22.
Manufacturing growth is pegged to drop from 9.9% in FY22 to 1.6% in FY23 while construction growth may moderate to 9% in FY23 from 11.5% in FY22.
Trade, hotels, transport, communications & services related to broadcasting are pegged to grow at 13.7% after growing at just over 11% in FY22. Financial, real estate & professional services are seen growing at 6.4% in FY23, up from 4.2% in FY22.
In April 2022, India’s central bank had cut the GDP growth estimate from 7.8 per cent to 7.2 per cent, and further lowered it to 7 per cent in September, last year.
The GDP growth in the second quarter of the fiscal slowed to 6.3 per cent from 13.5 per cent in the preceding three months.