GDP stunner: Growth zooms to 8.4% in Q3

Higher GST receipts, lower subsidy outgo widen GVA-GDP gap

- PRIYANSH VERMA

FY24 EXPANSION NOW PEGGED AT 7.6%

INDIA'S GROSS DOMESTIC PRODUCT (GDP) expanded at a six-quarter high rate of 8.4% in October-December (Q3FY24), the National Statistical Office (NSO) said on Thursday, taking economists by surprise, as most of them had expected the growth to come in below 7%.

Apart from economic momentum, the higher-than-expected Q3 growth was also helped by robust indirect taxes, lower subsidy outgo and substantial revisions for national income estimates for several previous quarters, which created a more favourable base effect than assumed.

With this, the NSO revised the GDP growth for 2023-24 to 7.6% in its second advance estimates, up from 7.3% projected earlier, and the 2022-23 growth, to 7% from 7.2%. The Reserve Bank of India had projected the 2023-24 growth at 7%, and the International Monetary Fund at 6.7%.

The gross value added (GVA), a more definitive measure of the state of the economy, however, expanded at 6.5% in Q3FY24, a rate in conformity with forecasts. The advance estimate pegged GVA expansion in 2023-24 at 6.9% upon a revised rate of 6.7% for 2022-23.

In nominal terms, GDP growth for 202223 is now pegged at 9.1%, up from 8.9% in the first advance estimates. This would mean the Centre's fiscal deficit for 2023-24 could come in at 5.9% from 5.8% projected in the interim Budget, if other budget projections hold true.