GDP of India: Current and historical growth rate, India's rank in the world

Get insights into India's GDP in 2023. Learn about the economy's growth and potential as India propels itself towards a prosperous future

Published: Aug 14, 2023 07:08:31 AM IST
Updated: Sep 29, 2023 05:10:21 PM IST

GDP of India: Current and historical growth rate, India's rank in the world

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 2023. 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 (Q4 and FY23 data)

India's economy expanded by 6.1 percent in the Q4 of the fiscal year 2022-23, leading to an annual growth rate of 7.2 percent. The growth rate during the January-March period surpassed the 4.5 percent expansion witnessed in the previous quarter of October-December 2022-23.

According to official figures released on May 31, 2023, The estimated Q4 GDP for the current fiscal year stands at ₹43.62 lakh crore, compared to ₹41.12 lakh crore recorded in Q4 of the previous fiscal year 2021-22.

Also Read: Debt-to-GDP ratio of Indian states in 2023

On June 12, 2023, Finance Minister Nirmala Sitharaman's office tweeted that India's GDP touched the $3.75 trillion mark in 2023. The Ministry also confirmed that India has now become the fifth largest economy in the world, moving from the tenth spot. At $3,737 billion in current price terms, India's GDP is only lower than the US ($26,854), China's ($19,374 billion), and Germany's ($4,309 billion).

Also Read: Fiscal deficit: Meaning, history in India, causes, current deficit and more

India's overall 7.2% GDP growth was fueled by the strong performance in the services sector and robust consumption, solidifying India's position as one of the world's fastest-expanding and major economies.

India's nominal GDP or GDP at current prices for the fiscal year 2022-23 is projected to reach ₹272.41 lakh crore, (approximately $3.30 trillion), marking a significant growth rate of 16.1 percent compared to the ₹234.71 lakh crore (approximately $2.84 trillion) in 2021-22.

The Indian economy has rebounded since the COVID-19 pandemic, with an exponential growth rate of 9.1 percent in the 2021-22 financial year. The continued momentum indicates India's resilience and ability to recover from the hindrances caused by the global health crisis.

One notable factor contributing to India's growth is the increase in imports of capital goods, which surged by almost 20 percent in FY23 compared to the previous year. This indicates improved private sector capital formation and signals confidence in the country's economic prospects.

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While private consumption remained weak in the fourth quarter of FY23, it remained strong overall for the fiscal year. Private consumption had already surpassed pre-pandemic levels in the third quarter, driven by pent-up demand and the release of consumer spending.

India’s Chief Economic Advisor, V Anantha Nageswaran,  has highlighted that retail inflation is expected to come down to around 4 percent—the midpoint of the target band of the Reserve Bank of India—in the current financial year. This projection provides hope for stable prices and improved purchasing power for consumers.

Another positive development is the government's investment, which is beginning to crowd in private investment.

Looking ahead, the Reserve Bank of India projects GDP growth of 6.5 percent for the current financial year, with the first quarter estimated at 7.6 percent. This forecast reflects the central bank's confidence in India's economic prospects and commitment to maintaining a stable growth trajectory.

Also Read: 1 USD to INR: From 1947 to 2023

  • India's Current GDP (As of June 2023): $3.75 trillion
  • India's GDP Growth Rate (2022-23): 7.2%
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.

Also Read: GDP of Indian states and union territories

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

GDP Statistics
Year GDP GDP Per Capita (Nominal) GDP Growth
2023 (till June) $3,737.00B $2601 6.5% (Forecast)
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%

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.

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.

According to the National Statistical Office, the estimated annual per capita (net national income) at current prices for the year 2022-23 is reported to be Rs 1,72,000.

India’s rank in GDP

Rank Country GDP (in U.S. dollars) Annual Growth rate
1 United States of America 23.3 trillion 1.58%
2 People's Republic of China 17.7 trillion 6.3%
3 Japan 4.9 trillion 1.3%
4 Germany 4.3 trillion 0.2%
5 India 3.75 trillion 7.2%

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 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.

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