Indian economy is likely to slowed down during October-December quarter (Q3) of Fiscal Year 2023-24. A day ahead of the government coming out with the GDP numbers, economists and research agencies projected the growth to be anywhere between 6 to 6.8 per cent.

RBI has projected growth to be 6.5 per cent. India Ratings & Research (Ind-Ra) has come up with the same number as RBI. ICRA’s growth expectation is 6 per cent. GDP grew by 7.6 per during July-September quarter (Q2) of FY 24 while it was 4.5 per cent during Q3 of FY 23. One reason cited for lower growth on sequential basis is poor performance of agriculture and industry.

A report by SBI research on Wednesday said, “Factoring the slight decline in economic activity in Q3 FY24, we estimate that GDP (Gross Domestic Products) should grow in the range of 6.7-6.9 per cent with a GVA (Gross Value Added) growth of 6.6 per cent.” This projection came with a rider. Growth will be 6.8 per cent provided there is no change in the base. “It could hit 7 per cent on the back of likely downward revision in Q3FY23 estimates,” it said.

On agriculture, the report said that as per First Advance Estimates, the production of major kharif crops for 2023-24 is 148.5 MMT, which is a decline of 4.6 per cent from FY23. The sowing season for rabi crops concluded on February 23, indicating a slight increase in overall acreage compared to the previous year. However, concerns arose over the sown area under cereals, which saw a decline of 6.5 per cent from the previous year.

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While agriculture may see some moderation if the the rabi output does not offset the kharif shortfall, value added in agriculture will decline. The inland fish production has shown a rapid growth from 2014-15 to 2022-23 and reached 131.13 lakh tonnes in 2022-23. The share of fisheries sector constitutes about 1.07 per cent of the total national GVA and 6.86 per cent of Agricultural GVA. This might support the Agri and Allied sector growth in FY24.

ICRA had earlier maintained lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in government expenditure and an uneven monsoon which it said will dampen the GDP growth prospects down to 6 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024.

The agency estimated the GVA (gross value added) growth is expected to ease to 6 per cent in Q3 from 7.4 per cent in Q2. During this period, industrial growth is estimated to slow down to 8.8 per cent from 13.2 per cent. Similarly, the growth rate of agriculture is expected to come down to 0.5 per cent from 1.2 per cent. However, services are estimated to improve to 6.5 per cent in Q3 from 5.8 per cent of Q2.