GDP of India: Current and historical growth rate, India's rank in the world
By Forbes India| May 7, 2024
Get insights into India's GDP in 2023. Learn about the economy's growth and potential as India propels itself towards a prosperous future
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. 2023 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)
India’s GDP registered a growth of 8.4 percent in the third quarter of FY24, according to the estimates of the Statistics Ministry. The new numbers showed a remarkable 4.1 percent increase in GDP growth compared to the third quarter of FY23 when it was 4.3 percent.According to the Ministry of Finance, real GDP recorded a growth of 7.6 percent in FY24. The robust demand for residential fueled the growth of the construction sector by double digits in FY24. The manufacturing and service sectors also registered a growth in Q3. However, private consumption growth at 3.6 remains a worry for economists.
The share of exports in GDP stood at 22.2 percent in the third quarter. It has registered a marginal decline, compared to the previous quarter.
In Q1 FY24, GDP growth surged to 7.8 percent, surpassing many major economies of the world, such as the US, UK, and China. This was an impressive achievement compared to the 6.1 percent growth rate in the preceding quarter. Within various sectors of India, the agriculture sector demonstrated a visible growth rate of 3.5 percent, while the manufacturing sector had 4.7 percent growth.
Also Read: Fiscal deficit: Meaning, history in India, causes, current deficit and more
In the Q2 FY24, the GDP growth of 7.6 percent showed a broad-based recovery of India from the pandemic. Especially domestic demand for employment increased in spite of the global risk and unexpected factors. While the agriculture, forestry and fishing industry saw growth of 1.2 percent, the manufacturing sector also saw growth of 13.9 percent compared to Q1 FY24.
Q3 FY24 shook everyone as it surpassed the past growth of 7.6 percent to 8.4 percent. This quarter's growth has been the highest since the last five quarters. Growth in certain sectors, like services, manufacturing, and construction, has had quite an impact on the rise of the GDP growth rate. Private consumption has also provided a good surge to the GDP growth rate.
_RSS_According to government data, India’s GDP growth rate is higher than the major economies such as Russia, the USA, China, and Japan.
- India's Current GDP (As of Q3 FY24): $4.11 trillion
- India's GDP Growth Rate (Q3 FY24): 8.4%
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, the economy is contracting or in recession.
According to official data released on May 31, the Indian economy recorded a growth of 6.1 percent in the fourth quarter of the fiscal year 2022-23. This strong performance contributed to an annual growth rate of 7.2 percent.
Historical GDP and growth rate of India
| Financial Year | GDP | GDP Per Capita (Nominal) | GDP Growth |
|---|---|---|---|
| 2024 (Q3,FY2024) |
$4,112.00B* | $2,845 | 8.4% |
| 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 per government of India
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.