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Business News/ Economy / India's Q3 GDP growth at 8.4%, beats D-Street estimates; economy grows at fastest pace in 6 quarters: 5 key highlights

India's Q3 GDP growth at 8.4%, beats D-Street estimates; economy grows at fastest pace in 6 quarters: 5 key highlights

India Q3 GDP: Double-digit growth in the manufacturing sector and a good construction sector growth rate were responsible for the better-than-expected performance, said the National Statistical Office.

India has retained its position as the fastest-growing economy. (Image Credits: REUTERS/Danish Siddiqui/File Photo) (Reuters)Premium
India has retained its position as the fastest-growing economy. (Image Credits: REUTERS/Danish Siddiqui/File Photo) (Reuters)

India Q3 GDP: The Indian economy grew 8.4 per cent during the October-December quarter of the current financial year 2023-24 (Q3FY24), remaining the fastest-growing major economy in the world, according to gross domestic product (GDP) data released by the Statistics Ministry on Thursday, February 29. The rise in GDP growth was supported by robust growth in manufacturing and construction sectors, along with high domestic demand.

“GDP at constant (2011-12) prices in Q3 of 2023-24 is estimated at 43.72 lakh crore, against 40.35 lakh crore in Q3 of 2022-23, showing a growth rate of 8.4 per cent. GDP at current prices in Q3 of 2023-24 is estimated at 75.49 lakh crore, as against 68.58 lakh crore in Q3 of 2022-23, showing a growth rate of 10.1 per cent," said the National Statistical Office (NSO).

Follow Live Updates: Indian economy grows by 8.4% in Oct-Dec quarter

Commenting on the GDP data, Prime Minister Narendra Modi said on Thursday that the GDP growth figure for the third quarter of the current fiscal displayed the strength and potential of the Indian economy. 

PM Modi said on X, “Robust 8.4 per cent GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!''.

India Q3 FY24 GDP Growth: 5 Key Takeaways


1. Q3 GDP growth sharply above Street estimates, RBI projections
The GDP growth in the December quarter rose sharply above D-Street estimates along with growth projections by the Reserve Bank of India (RBI). The RBI had maintained real GDP growth for 2023-24 at 7 per cent with Q3 at 6.5 per cent and Q4 at 6 per cent. 

At its last monetary policy meeting, the central bank showed utmost concern on the rising inflation and its attached potential risk to the growth outlook. D-Street economists and several brokerage firms had estimated the GDP growth to be around 6-7 per cent in the third quarter, predicting a slowdown in the industrial sector.

2.Manufacturing, construction sectors support GDP growth
"Double-digit growth in the manufacturing sector, followed by a good growth rate of construction sector" were responsible for the better-than-expected performance, said the NSO. The manufacturing sector, which for the past decade has accounted for just 17 per cent of Asia's third-largest economy, expanded 11.6 per cent year-on-year in the December quarter. 

The construction sector also grew by 9.5 per cent, driving growth in the quarter under review. Public administration, defence and other services posted 7.5 per cent growth against 3.5 per cent in the third quarter of the last fiscal.

3.FY24 GDP growth revised to 7.6% from 7.3%
The Statistics Ministry, in its second advance estimate of national accounts, pegged the country's full-year GDP growth at 7.6 per cent. It had projected a growth of 7.3 per cent for the current fiscal in its first advance estimates released earlier in January 2024. The projection in its second advance estimate comes despite expectations of slower growth in consumer spending and government expenditure.

The NSO also revised the GDP growth for 2022-23 to 7 per cent against the earlier estimate of 7.2 per cent. The nominal GDP or GDP at current Prices in 2023-24 is estimated to attain a level of 293.90 lakh crore, against 269.50 lakh crore in 2022-23, showing a growth rate of 9.1 per cent.

4.Govt spending contracts 3.2%, private consumption up 3.5%
Private consumption rose 3.5 per cent in the December quarter from a year earlier, while government expenditure contracted 3.2 per cent. Investment surged 10.6 per cent in the quarter from the year-ago period.

Also Read: Cabinet approves 24,420 crore fertilizer subsidy for 2024 kharif season

The agriculture sector contracted 0.8 per cent given adverse weather conditions. India recorded the weakest monsoon rains in five years, forcing the government to extend curbs on exports of farm commodities such as sugar, rice and wheat. The growth in the services sector -- trade, hotel, transport, communication and services related to broadcasting stood at 6.7 per cent.

5.CEA Nageswaran urges rating agencies to revise FY24 projections
On India's Q3 GDP print, Chief Economic Advisor (CEA) V Anantha Nageswaran said that overall, the Indian economy ticks many boxes in the right way. ‘’The economy continues to defy expectations underscores the structural transformation. So there is a case for global agencies to make an upward adjustment to their estimate of India's potential growth,'' said CEA Nageswaran.

The high-frequency indicators point toward continued good performance in Q4 FY24 as well, according to CEA. The global demand has been a challenge given uncertain global growth. However, India's external sector is not showing any signs of vulnerability, according to Nageswaran.

Also Read: India Apr-Jan fiscal deficit at 11.03 trillion, 64% of annual target

Economists expect RBI to maintain policy stance; see no immediate need for rate cuts

Commenting on GDP data, Nish Bhatt, Founder & CEO, Millwood Kane International highlighted that at 8.4 per cent YoY, this is the strongest growth since the second quarter of 2022. 

"Moving forward, India can be expected to maintain its position as one of the world's fastest-growing economies, surpassing any comparable emerging market countries. However, we may see some near-term moderation due to the inflationary impact of the food prices, geopolitical, and the Red Sea crisis,'' said Bhatt.

On the policy stance, Thamashi De Silva, Assistant India Economist, Capital Economics, London said, ‘’Any slowdown in growth will be mild, particularly as the government's infrastructure drive is likely to prop up activity. This limits any immediate need for rate cuts. We think the Reserve Bank of India will only start easing policy in Q3 2024, much later than most other major emerging markets.''

‘’Looking ahead, we expect economic activity to moderate over the coming quarters but it should still remain exceptionally strong, which will limit the need for policy loosening for a while,'' added De Silva.

Radhika Rao, Senior Economist, DBS Bank, Singapore agreed. “Risks to the outlook are mainly exogenous, with an unexpected worsening in the geopolitical situation as well as volatile commodity movements. The robust growth report will likely reinforce the central bank's optimism on the outlook, reinforcing their preference to keep policy conditions tight," said Rao.

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Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at
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Published: 29 Feb 2024, 06:18 PM IST
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