GDP blitz at 7.6% lays ground for FY24 show

Mining, manufacturing, construction fuel Q2; core sector grows 12% in Oct

- Rhik Kundu, Dhirendra Kumar

The Indian economy shot past expectations to clock an impressive 7.6% growth in the September quarter, retaining its crown as the world’s fastest-growing major economy. That’s a major step-up from 6.3% in the corresponding period of the previous fiscal year.

While manufacturing, mining and construction put up a robust show, agriculture cooled thanks to an erratic monsoon, National Statistical Office (NSO) data showed. The quarter saw double-digit growth in fixed investments and government spending, while household consumption rose marginally.

A Mint poll of 18 economists had estimated the gross domestic product (GDP) growth to be about 6.8% in the quarter.

The Indian economy expanded at 7.8% in the first quarter of the current fiscal year. The Reserve Bank of India’s (RBI) forecast for 2023-24 is 6.5%, while others like investment bank Goldman Sachs see a more sedate 6.2% growth.

Separately, the output data for eight core sector industries showed an increase of 12.1% in October against the previous year’s 0.7%, setting the stage for continued momentum in the December quarter as well.

With the 7.6% GDP growth in real terms in the September quarter, India is now comfortably set to achieve 6.5% growth in the current fiscal, chief economic advisor Anantha Nageswaran said. “We are more comfortable with 6.5% growth forecast for FY24 now," Nageswaran said at a briefing after the second quarter GDP figures were released by the statistics ministry.

India’s growth figures come at a time when major global economies are facing slowing growth and steep interest rates. The International Monetary Fund (IMF) has predicted that the Indian economy will outperform Indonesia (4.93%), China (4.9%), the US (2.93%), Japan (1.2%), France (0.69%), the UK (0.62%) and Germany (-0.37%) in the September quarter.