Lok Sabha Question No. 1262 (UNSTARRED), answered on 2023-12-11
Subject: Gross Domestic Product
Ministry: FINANCE
Asked by: Y. S. Avinash Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1262

TO BE ANSWERED ON DECEMBER 11, 2023

## GROSS DOMESTIC PRODUCT

## 1262. SHRI Y.S. AVINASH REDDY:

## Will the Minister of FINANCE

Be pleased to state:

- (a) whether  the  estimates  of  Gross  Domestic  Product  (GDP)  of  the  National  Statistical  Office predicts growth for the quarter, at 7.8 per cent, which was lower than the rate projected by the Reserve Bank of India (RBI) at 8 per cent as some private-sector economists were expecting growth above 8 per cent and in terms of sectoral performance, the agriculture sector grew 3.5 per  cent  year-on-year  (Y-o-Y),  though  sustaining  growth  would  be  difficult,  given  the prospects  of  deficient  rainfall  and  the  manufacturing  sector  expanded  4.7  per  cent  Y-o-Y, which was disappointing;
- (b) if so, the details thereof indicating GDP growth rate comparatively since 2014 year onwards to till date, year-wise along with the reasons for upsurge/downfall; and
- (c) the corrective steps taken/being taken by the Government in this regard?

## ANSWER

## MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a): As per the estimates of Gross Domestic Product released by the National Statistical Office, Ministry of Statistics and Programme Implementation, India's Real GDP grew at 7.8 per cent in Q1 of  2023-24.  Growth  in  Real  GDP  in  Q2  of  2023-24  stood  at  7.6  per  cent,  higher  than  the Reserve Bank of India (RBI) estimate of 6.5 per cent. The real GDP growth in Q2 of 2023-24 was not only higher than the median projections of 6.8 per cent by professional forecasters but also their highest estimate of 7.4 per cent. The manufacturing sector registered a year-on-year growth of 13.9 per cent in Q2 of 2023-24. The agriculture sector witnessed a growth of 1.2 per cent in Q2 of 2023-24. Sufficient reservoir levels, adequate availability of fertiliser and seeds, growing tractor sales and expanding credit support to the agriculture sector augur well for healthy rabi sowing in the current season.

(b): India's GDP growth rate since 2014 till date is given in the table below: -

Table: India's Real GDP Growth Rate

| Year              |   Real GDP Growth Rate (Per cent) |
|-------------------|-----------------------------------|
| 2013-14           |                               6.4 |
| 2014-15           |                               7.4 |
| 2015-16           |                               8   |
| 2016-17           |                               8.3 |
| 2017-18           |                               6.8 |
| 2018-19           |                               6.5 |
| 2019-20 (3 rd RE) |                               3.9 |
| 2020-21 (2 nd RE) |                              -5.8 |
| 2021-22 (1 st RE) |                               9.1 |
| 2022-23 (PE)      |                               7.2 |
| Q1: 2023-24       |                               7.8 |
| Q2: 2023-24       |                               7.6 |

Source: NSO, MoSPI

India's Real GDP has witnessed remarkable growth since 2014. However, it contracted by 5.8 per cent  in  2020-21  due  to  the  impact  of  the  COVID-19  pandemic.  The  Indian  economy  grew substantially  at  9.1  per  cent  in  2021-22,  completely  recovering  the  pre-pandemic  GDP  level  of 2019-20. In 2022-23, India's Real GDP expanded by 7.2 per cent, much higher than the growth witnessed in major Advanced Economies and Emerging Market Economies. This highlights the ability of the Indian economy to sustain robust growth despite geo-political headwinds.

(c): To boost growth, various initiatives have been taken by the government during the last nine years. Key initiatives include measures aimed at formalisation of the economy, enhancing credit for  MSMEs,  improving  ease  of  doing  business,  facilitating  economic  opportunities  for  all,  and strengthening  the  banking  sector.  The  measures  such  as  the  launch  of  Make  in  India  to  boost manufacturing in India, Start-up India to build an ecosystem for nurturing innovation and startups, the introduction of the Insolvency and Bankruptcy Code (IBC), rationalisation of labour laws, reduction in the corporate tax rate, and the introduction of the Goods and Services Tax (GST) have provided a significant  opportunity  to  improve  growth  momentum  by  reducing  barriers  to  trade, business, and related economic activities.

Further, a series of measures were announced in the Union Budget 2021-22, including an increase in  the  Capex  budget  by  34.5  per  cent  over  2020-21,  an  expansion  of  the  Production  Linked Incentive (PLI) scheme to 14 sectors, the launch of the National Monetisation Pipeline, increase in FDI limit in the insurance sector from 49 per cent to 74 per cent, among others. In addition to this, in  the  Union  Budget  2022-23,  the  Capex  budget  was  again  increased  by  35.4  per  cent  over  the previous year; PM Gatishakti was launched, and the Emergency Credit Line Guarantee Scheme (ECLGS)  was  extended  to  provide  continued  support  to  MSMEs,  among  others.  The  National Logistics Policy was launched in September 2022 to lower the cost of logistics at par with other developed countries.

The Budget 2023-24 has also announced specific measures to improve growth. These include an increase in capital investment outlay for the third year in a row by 33 per cent to ₹10 lakh crore (3.3  per  cent  of  GDP).  Direct  capital  investment  by  the  Centre  was  also  complemented  by  the provision made for the creation of capital assets through Grants-in-Aid to States. The 'Effective Capital Expenditure' of the Centre has been budgeted at 13.7 lakh crore (4.5 per cent of GDP) for 2023-24. Further, to improve logistics performance, one hundred critical transport infrastructure projects for last and first-mile connectivity for ports, coal, steel, fertiliser, and food grains sectors have been identified.

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