In FY24, India is expected to surpass other major economies

Shaktikanta Das, the governor of the Reserve Bank of India (RBI), stated approximately a month ago that strong GDP growth was anticipated for India in the second quarter of FY24.

He accurately predicted that the nation’s Q2 growth will surprise everyone on the upside when he made this comment during a media gathering on October 31. The GDP figures, which were released on Thursday, took the economic gurus by surprise as they all predicted a 6.8% expansion this quarter. But the real figure, 7.6%, surprised everyone.

On November 1, 2023, the government announced the monthly revenue collection data for the Goods and Services Tax (GST), and it was clear that this kind of growth was underway. October of this year saw a spike in the monthly GST collection to ₹1.72 lakh crore, the second largest amount since the new indirect tax regime went into effect in July 2017. The monthly GST collection is a reflection of actual economic operations. In addition, the second quarter of FY24 had an average growth of 9.7% in the core Index of Industrial Production (IIP), and the PMI for both manufacturing and services demonstrated strong levels at an average of 57.9 and 61.1, respectively.

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Consequently, India’s trajectory as the world’s fastest-growing major economy persisted. And this momentum for growth is going to stay. A recent report took this into account.

The economic engine of Asia-Pacific is predicted to move from China to South and Southeast Asia, with India leading the way and seeing its GDP rise to 7% by 2026, according to S&P Global Ratings’ credit research report titled “China Slows, India Grows” released earlier this week. And it’s obvious.

India’s success is noteworthy in addition since it is being achieved in the face of a strong global headwind. Earlier this week, Union Finance Minister Nirmala Sitharaman stated that although domestic strengths are sustaining India’s rapid growth, external headwinds are negatively impacting the Indian economy. Despite global headwinds and geopolitical concerns, she added, India’s economic growth is nevertheless propelled by its sizable domestic market, the middle class’s purchasing power, and its stable policies.

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Chief economic advisor V Anantha Nageswaran commented on the most recent GDP figures on Thursday, stating that while there was a risk to the negative from foreign factors, the Indian economy appeared to have bright development prospects. He also praised the government’s initiatives to sustain rapid economic growth, including the National Logistics Policy, PM GatiShakti, massive capital expenditures, growth of public digital platforms, and Production-Linked Incentive (PLI) programs.

In fact, the second quarter’s 7.6% GDP growth, which came after the first quarter’s notably robust 7.8% growth rate, is a significant accomplishment. It comes out to be a greater accomplishment, primarily because India’s robust manufacturing sector significantly contributed to the rise in Q2.

Proper policies and well-timed incentives have allowed the government to boost the GDP by 7.7% in the first half of 2023–2024. India is expected to fare better than other large economies for the entirety of FY24 with this kind of lead over other major economies.