New Delhi, Feb 28: India's economic growth is projected to accelerate to 7.6% in the fourth quarter (Q4) of FY24, driven by a significant increase in government capital expenditure (capex) and additional spending linked to the Maha Kumbh congregation, Chief Economic Adviser (CEA) V Anantha Nageswaran stated on Friday. This growth is necessary to meet the full-year GDP target of 6.5%, which has been revised upward by the National Statistics Office (NSO).
Q3 GDP Growth Slows to 6.2%
In the third quarter (Q3) ending December 2024, India’s GDP growth slowed to 6.2%, a sharp decline from 9.5% in the same period last year. The slowdown was attributed to weak performances in mining, manufacturing, and other non-agricultural sectors.Despite the moderation, the NSO has revised its GDP growth estimate for FY24 to 6.5%, up from its initial 6.4% projection in January. Achieving this requires the economy to expand by 7.6% in Q4, a target that Nageswaran considers realistic.
Factors Supporting 7.6% Growth
Highlighting favorable economic factors, Nageswaran said, "There is a significant pickup in government capex, and additional expenditure is happening due to the Maha Kumbh congregation, which is driving economic activity." He further noted that despite global economic challenges, India’s domestic demand remains resilient, reinforcing the possibility of hitting the Q4 target.Stock Market Reaction and Global Trade Concerns
On the stock market decline, Nageswaran urged investors to focus on India's long-term economic prospects rather than short-term fluctuations. Sensex and Nifty plunged nearly 2% on Friday, mirroring global market weakness following the announcement of an additional 10% tariff on Chinese goods.India Nears $4 Trillion Economy
India's economic momentum continues, with its nominal GDP projected to reach ₹331.03 lakh crore ($4 trillion) in FY25, up from ₹301.23 lakh crore in FY24, reflecting a 9.9% growth rate.Inflation on a Downward Trend
Regarding inflation, Nageswaran stated that it is trending downward, supported by strong kharif production, better rabi sowing, improved reservoir levels, and seasonal corrections in vegetable prices. He emphasized that the Union Budget’s focus on agriculture, MSMEs, investment, and exports will enhance India’s medium-term economic prospects.Outlook for Indian Economy
Despite external economic headwinds and global trade policy shifts, India’s economic momentum is expected to sustain. Growth will be driven by rising rural demand, urban consumption revival, and government spending.With a strong domestic foundation and policy support, India is well on track to achieve its FY24 growth targets and push towards a $4 trillion economy in FY25.
