Morgan Stanley s report suggests India s current economic surge resembles the mid-2000s, foreseeing a continuing investment-driven cycle. Noting high investment-to-GDP ratios, it projects a rise to 36% by FY27. Urban demand surpassing rural, reminiscent of the 2003-07 cycle, is expected to continue. India s global market share in goods and services, particularly in exports, mirrors growth seen in the mid-2000s.
The experience of China and the Asian Tigers during their high-growth years shows that the share of private consumption to GDP tends to decline and then plateau out as economies get richer. That’s because GDP growth was led by drivers other than consumption. That must be so for India, too.
In Q3FY24, the Indian economy outperformed expectations, growing at 8.4%, surpassing the predicted 6.6% rate. However, a significant divergence between GDP and Gross Value Added (GVA) raised concerns, with GVA growth at 6.5%. Economists caution that the high GDP may not reflect balanced growth, citing a decline in agriculture, uneven private consumption, and increased reliance on public capex.
Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of Rs 172.90 lakh crore, against the FRE (first revised estimates)of GDP for the year 2022-23 of Rs 160.71 lakh crore. India’s GDP Growth at Massive 8.4% in October-December Quarter; Financial Year 2023-24 Growth Upwardly Revised at 7.6%.