India's GDP growth surges to 7.2% in 2023, outpacing major economies

A rise in cashless payments and UPI has been cited as one of the reasons for the increase in the GDP rate. Image: Ashish Vaishnav/SOPA Images/LightRocket via Getty Images

India has witnessed a 7.2 percent growth in Gross Domestic Product (GDP), which is higher compared to other major economies such as the US, China, Indonesia, and the UK, among others. As per data released by the government on its Twitter handle @mygovindia, Indonesia has observed a 5.3 percent growth, second to India, and Japan stands at the lowest with a 1.1 percent increase in 2023.

MSME schemes, growth in coal mining, rise in cashless payments and UPI, surge in electricity consumption, a considerable growth in freight loading for railways, boom in startups and entrepreneurship, and an all-time high in India’s exports are some of the reasons that the government has outlined behind the spurt in the GDP rate.

During the recent monetary policy committee (MPC) meeting, the Reserve Bank of India (RBI) revealed its forecast for India's GDP growth in the current fiscal year. The central bank expects a growth rate of 6.5 percent, with the following quarterly projections: 8 percent for the June quarter (Q1), 6.5 percent for Q2, 6 percent for Q3, and 5.7 percent for Q4.

US-based financial services company Moody’s Analytics said that the Indian economy is expected to clock a 6-6.3 percent growth in the June quarter, which was about 1.7-2 percent lower than the projection made by the RBI for the first quarter of 2023.

"India's GDP has reached $3.75 trillion in 2023, from around $2 trillion in 2014; moving from 10th largest to 5th largest economy in the world. India is now being called a bright spot in the global economy”, Finance Minister Nirmala Sitharaman tweeted this morning.

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She also highlighted other milestones for India, including the highest fintech adoption rate in the world, highest digital payments transactions in the world in 2022, and banks from 18 countries being able to trade in Indian rupee.

India’s GDP in current price terms ranks above the UK, France, Canada, Russia, and Australia, but below the USA, China, and Germany.