India forecast annual growth of 7.3 per cent in the fiscal year ending in March, the highest rate of any of the major global economies, providing a boost for Prime Minister Narendra Modi ahead of the national elections scheduled to be held before May.
"These are early projections for 2023/24," the National Statistical Office (NSO) said in a statement on Friday, adding improved data coverage, actual tax receipts and spending on state subsidies could affect subsequent revisions, as per Reuters reports.
The first advance estimates of annual gross domestic product follow last month's increased forecast to 7 per cent from the Reserve Bank of India (RBI), up from an earlier estimate of 6.5 per cent.
Analysts said growth exceeding 7 per cent for a third year in a row in the context of a global slowdown would help Modi win a third term to rule Asia's third-largest economy.
"This growth comes at a time when global conditions remain weak and its credit goes to how the government is managing the economy," Rahul Bajoria, economist at Barclays Investment Bank, said.
S&P Global Ratings expects India will remain the fastest-growing major economy for the next three years, putting it on track to become the world's third-largest economy by 2030, overtaking Japan and Germany.
India's economy grew 7.2 per cent in 2022/23 and 8.7 per cent in 2021/22.
Finance Minister Nirmala Sitharaman will present an interim annual budget on February 1 and is expected to increase spending on infrastructure, helped by rising tax receipts, while aiming to lower the fiscal deficit from 5.9 per cent of GDP in the current fiscal year.
Government spending is estimated to rise by about 4 per cent year-on-year in 2023/24 compared to a 0.1% increase in the previous fiscal year, while private investment would rise by 10.3 per cent, lower than an 11.4 per cent rise in the previous year, data showed.
Private consumption, which accounts for nearly 58 per cent of GDP, expanded by 4.4 per cent year-on-year compared to 7.5 in the previous fiscal year.
Modi has taken steps to attract global companies including Apple and Japanese companies, to set up factories in India, while increasing spending to build roads, ports and airports.
Manufacturing, which accounts for about 17 per cent of GDP, is estimated to expand 6.5 per cent year-on-year in 2023/24, compared to 1.3 per cent a year ago, while construction output was seen growing by 10.7 per cent, up from 10 per cent in the previous year, data showed.
India posted faster-than-expected economic growth of 7.6 per cent year-on-year in the September quarter, after growing 7.8 per cent in the previous quarter, which prompted many private economists to revise their yearly estimates upwardly.
Many economists feel that India's growth was fuelled by sectors, including information technology and financial
services that only create limited jobs and do not help the poor in rural areas.
Growth in farm output, which contributes about 15 per cent of GDP and employs more than 40 per cent of the workforce, was seen slowing to 1.8 per cent in the current fiscal year, from 4 per cent a year ago.
The average per capita income in the South Asian nation with a population of over 1.4 billion, remains around $2,500, less than a quarter of China's.
