India's Economy Surges: Insight on Q3 GDP Growth


Yash Vora

3/20/20242 min read

The Indian economy grew by 8.4% during the October-December quarter of FY 24, according to the GDP data of India for the third quarter of Financial Year 2023-24, released by the Statistics Ministry on February 29.

India’s economic growth during the December quarter has emerged as a surprise for economists who were expecting a contraction in its growth due to a nominal decline in government spending, slow growth of the industrial output, and an uneven monsoon in the third quarter. However, a strong construction and manufacturing sector helped the nation outperform the experts' expectations.

Here are the top highlights of the GDP

-India’s GDP grows at 8.4% during Q3 FY24

Beating the market estimates and the Reserve Bank of India’s projections, India’s GDP expanded at the rate of 8.4% during the third quarter of Financial Year 2023-24

-Revised estimate for GDP growth rate in FY 24

According to the second advance estimate of national accounts, the Statistics Ministry, India’s full-year GDP growth rate was fixed at 7.6% from 7.3%. The increased revised advanced estimates aside from the impact of slower growth in consumer spending and government expenditure. In addition, the NSO also revised the GDP growth for 2022-23 to 7% against the earlier estimate of 7.2%.

-Manufacturing, construction top performing sectors

India’s GDP growth was fuelled by the strong performance of the manufacturing and construction sectors of the country. "Double-digit growth in the manufacturing sector, followed by a good growth rate of the construction sector" were responsible for the better-than-expected performance, said the NSO.

The manufacturing sector expanded 11.6% annually in the third quarter, whereas the construction sector grew by 9.5%.

The agriculture sector emerges as the weakest sector

Falling on expected lines, India’s agriculture sector contracted by 0.8% in the December quarter. The sector had witnessed a growth of 1.6% during the previous quarter. The growth rate stood at 5.2% during the same quarter in the previous financial year. The slump in the agriculture sector was the result of poor monsoon conditions and El-Nino impact. However, prospects of healthy rabi harvesting and expectations of the fading away of El Nino and the forecast of a normal monsoon bodes well for a better-than-normal kharif sowing, said CEA Nageswaran.

-Increase in private consumption, decline in government spending

The GDP numbers revealed a contraction in government consumption to 3.2% during the Q3 FY 24. The private consumption in the sector rose 3.5% in the December quarter from a year earlier.

-Decline in exports and imports

There was a marginal decline in the share of exports in GDP during the December quarter. The share stood at 22.2% during the quarter, declining from 23.3% in the same quarter of the previous year. At the same time, there was a decline in the share of imports in the GDP which stood at 24% during the quarter compared to 27.5% during the previous quarter.

-Marginal decline in Gross fixed capital formation

There was a marginal decline in gross fixed capital formation (GFCF), an indicator of the level of investments in the country during the December quarter of FY24. However, it increased by 32.4% annually in the December quarter.

Thank you.


Sejal Singh,

Kautilya, IBS Mumbai.