In the vast landscape of global economies, India stands out with its meteoric rise and unwavering determination to reach new heights. With its rich cultural heritage and a population of over 1.4 billion people, India has emerged as an economic powerhouse, consistently showcasing its prowess on the global stage. FY 2024 has proven to be a turning point as India's GDP surges, solidifying its position as a frontrunner in the global economic race.In this article, we unravel the intricacies of India's GDP growth in 2024. We will delve into the numbers, explore the driving forces behind this remarkable achievement, and gain insights into the implications for India's future. Also Read: Top 10 largest economies in the world in 2023
India’s current GDP (Q3 FY24)
In the last quarter of FY24, India's GDP grew by 8.2 percent, ₹47.24 lakh crore, according to the data released by the Ministry of Statistics and Programme Implementation and the National Statistical Office. It was better than NSO's earlier estimates for real GDP growth for FY24 at 7.3 percent. "Nominal GDP has witnessed a growth rate of 9.6 percent in FY24 over the growth rate of 14.2 percent in FY23,” the NSO said.
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MOSPI recorded that the Gross Value Added (GVA) grew by 7.2 percent in FY24 over 6.7 percent in 2022-23. In a press release, the government noted that the GVA growth was caused by 9.9 percent growth in the manufacturing sector and 7.1 percent growth in the mining sector in 2023-24.
Real GVA and GDP growth in Q4 have been estimated at 6.3 percent and 7.8 percent, respectively.
According to the press release, real GDP or GDP at Constant Prices is estimated to have attained a level of ₹173.82 lakh crore in FY24, against the First Revised Estimates (FRE) of GDP for FY23 of ₹160.71 lakh crore. The growth rate in Real GDP during FY24 is estimated at 8.2 percent compared to 7.0 percent in FY23. Nominal GDP or GDP at Current Prices is estimated to attain a level of ₹295.36 lakh crore in FY24, against ₹269.50 lakh crore in FY23, showing a growth rate of 9.6 percent.Also Read: Fiscal deficit: Meaning, history in India, causes, current deficit and more
If we look at the recent data from the International Monetary Fund (IMF), India’s GDP growth rate is higher than that of major economies such as Russia, the US, China, and Japan. In July 2024, the IMF raised India's growth forecast for FY25 by 20 basis points to 7 percent. It made the rationalisation that better private consumption, especially in rural India, has led to a rise in the growth outlook. So now, as per the IMF:
- India's Current GDP (FY24): $3.9 trillion
- India's GDP Growth Rate (FY24): 8.2%
Also Read: Unemployment rate in India (2008 to 2023): Current rate, historical trends and more
What is GDP growth rate
GDP growth rate refers to the pace at which a country's Gross Domestic Product (GDP) expands or increases over a specific period, usually measured annually or quarterly. Gross Domestic Product (GDP) is the market worth of all final services and products produced within its boundaries over a certain period.
The GDP growth rate is calculated by comparing the GDP of one period with the GDP of a previous period. It is expressed as a percentage and provides a measure of the country's economic performance and overall economic health. If the GDP growth rate is positive, the economy is growing; if it is negative, it is contracting or in recession.
Historical GDP and growth rate of India
| Financial Year | GDP | GDP Per Capita (Nominal) | GDP Growth |
|---|---|---|---|
| 2024 | $3,940.00B* | $2,730 | 8.2% |
| 2023 | $3,737.00B | $2,610 | 7.2% |
| 2022 | $3,385.09B | $2,389 | 7.00% |
| 2021 | $3,150.31B | $2,238 | 9.05% |
| 2020 | $2,671.60B | $1,913 | -5.83% |
| 2019 | $2,835.61B | $2,050 | 3.87% |
| 2018 | $2,702.93B | $1,974 | 6.45% |
| 2017 | $2,651.47B | $1,958 | 6.80% |
| 2016 | $2,294.80B | $1,714 | 8.26% |
| 2015 | $2,103.59B | $1,590 | 8.00% |
| 2014 | $2,039.13B | $1,560 | 7.41% |
| 2013 | $1,856.72B | $1,438 | 6.39% |
| 2012 | $1,827.64B | $1,434 | 5.46% |
| 2011 | $1,823.05B | $1,450 | 5.24% |
| 2010 | $1,675.62B | $1,351 | 8.50% |
*As International Monetary Fund (IMF)
In India, the GDP growth rate portrays the fluctuations in the adjusted value of goods and services produced by the country's economy over a given period. India, one of the most robust economies globally, has experienced movements in both upward and downward directions concerning its GDP growth rate in recent years, considering the pre and post-pandemic situations.Also Read: Foreign Direct Investment (FDI) in India: Inflows in 2023 and last 10 years
GDP per capita
The gross domestic product (GDP) per capita is a metric for evaluating a country's general economic prosperity. GDP per capita is a way to achieve economic well-being that takes into account both the size of a country's economy and its population. The gross domestic product (GDP) divided by a country's population is a useful measure of the level of living and economic prosperity in that country. In many international studies, it is a benchmark against which nations' economies and citizens' standard of life can be evaluated.
India’s rank in GDP*
| Rank | Country | GDP (in U.S. dollars) | Annual Growth rate |
|---|---|---|---|
| 1 | United States of America | 28.78 trillion | 2.7% |
| 2 | China | 18.53 trillion | 4.6% |
| 3 | Germany | 4.59 trillion | 0.2% |
| 4 | Japan | 4.11 trillion | 0.9% |
| 5 | India | 3.94 trillion | 6.8% |
Data and rankings as per International Monetary Fund (IMF)
India is now the fifth-largest economy in the world GDP rankings list due to its strong economic foundations, thriving domestic demand, careful financial management, high saving rates and favourable demographic trends. The country's major economic contributors are traditional and modern agriculture, technology services, the handicraft industry, and business outsourcing.
Calculating GDP
GDP is calculated using the following formula:
Y = C + I + G + (X − M)
- C represents consumption, which includes spending on services, non-durable goods, and durable goods.
- G represents government expenditure, which includes salaries of employees, construction of roads, railways, airports, schools, and military expenses.
- I denotes investment, which consists of spending on housing and equipment.
- The difference between total exports and imports is referred to as net exports, denoted by (X-M).
- In this context, Y represents the Gross Domestic Product.
Frequently Asked Questions (FAQs)
1. Why is GDP an important economic indicator? GDP is an essential economic indicator as it provides a measure of the overall economic activity and growth of a country, helping policymakers and analysts understand the health of the economy.
2. How does GDP affect the living standards in India?
GDP growth is often associated with improved standards of living. Higher GDP indicates increased economic output, which can lead to better job opportunities, higher incomes, and improved access to goods and services for the population.
3. What are the main sectors contributing to India's GDP? The main sectors contributing to India's GDP are agriculture, industry, and services. Agriculture includes farming and related activities, industry includes manufacturing and construction, and services include sectors like finance, healthcare, education, and tourism.
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