The domestic rating agency ICRA predicted on Tuesday that in the March quarter of the 2023–24 fiscal year, India’s GDP growth will slow to 6.7%, a four-quarter low. The ICRA projects 7.8% GDP growth for the entire fiscal year 2023–2024.

In 2023–24, the Indian economy expanded by 8.2% in the June quarter, 8.1% in the September quarter, and 8.4% in the December quarter. India's GVA growth in Q4 FY2024 is predicted to be slowed by reduced volume growth combined with declining benefits from commodity prices, which are hurting the profitability of several industrial sectors, according to ICRA Chief Economist and Head of Research & Outreach Aditi Nayar.

Estimates released on May 31, 2023 show that India's GDP increased by 6.1% during the March quarter of the 2022–2023 fiscal year. For the entire fiscal year 2022–2023, the increase was 7%. 

On May 31, the GDP figures for the fourth quarter of 2024 (January through March) and the preliminary projections for the 2023–2024 budget are expected to be made public.

The gross value added (GVA) growth gap, which was a record 185 basis points (bps) in the previous quarter, is expected to narrow to 100 bps in Q4 FY2024, according to a statement from ICRA. This is because a narrower decline in the subsidy outgo was predicted to result in a smaller growth in the net indirect taxes during the March quarter.

Unless the growth for the first nine months of FY2023–24 is corrected, ICRA projects the GDP and GVA growth to print at 7.8% and 7%, respectively, for the entire year FY2024. GDP is the total amount of goods and services generated during a specific time frame. GDP less net taxes equals GVA (gross tax collection less subsidies).

"Notwithstanding the overhang of the unfavourable 2023 monsoon rains on agri output, there are some green shoots suggesting that a nascent revival in rural demand may be on the anvil," Nayar stated.

She stated that after declining by 4% in Q3 FY2024, domestic retail tractor sales rebounded to a Year-over-Year (YoY) rise of 7.7% in Q4 FY2024. In addition, a few publicly traded FMCG companies indicated that the rural economy was rebounding in the fourth quarter of FY2024, especially in the non-food sector.

This can be partially explained by both a low base and the spike in demand that occurs during the marriage season. Furthermore, Nayar stated, "Urban consumption is anticipated to have remained strong, albeit uneven, in Q4 FY2024."

In the March quarter of FY2024, ICRA reported that investment activity remained robust despite a varied trend shown by many lead indicators connected to investments. The state investor meetings in January 2024 caused a spike in new project announcements to the second-highest quarterly level, and there was a noticeable rise in the number of government- and private-led project completions, according to the report. 

But in the March quarter of FY2024 compared to the December quarter, a few investment-related indicators slowed down, and there was an implied reduction in the number of new project proposals in February and March 2024 instead of January 2024. According to ICRA, this illustrates a temporary caution in light of the Model Code of Conduct's implementation in March 2024 and the uncertainties surrounding the next parliamentary elections. 

According to ICRA, government capital expenditures increased by 31.6% YoY to Rs 1.3 trillion in January - February 2024; however, in light of the Model Code of Conduct, these expenditures may have decreased in March 2024 YoY.