Finance Minister Nirmala Sitharaman tabled the Economic Survey in Parliament today, projecting India’s GDP growth rate at a robust 6.5-7% for the financial year 2024-25. The survey highlights the country’s resilience in the face of global economic challenges, with the economy maintaining its momentum despite external headwinds.
According to the survey, global economic growth is expected to be 3.2% in 2023, with diverging growth patterns emerging among countries due to domestic structural issues, geopolitical conflicts, and monetary policy tightening. India, however, has bucked this trend, with its real GDP growing by 8.2% in FY24, exceeding 8% in three out of four quarters.
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The survey attributes India’s strong performance to macroeconomic stability, a thrust on capital expenditure, and sustained private investment. Gross Fixed Capital Formation increased by 9% in real terms in 2023-24, while healthier corporate and bank balance sheets are expected to further strengthen private investment.
Inflationary pressures have been effectively managed, with retail inflation declining to 5.4% in FY24 from 6.7% in FY23. Fiscal balances have also improved, despite expansionary public investment, thanks to tax compliance gains, expenditure restraint, and increasing digitization.
The external balance has been pressured by subdued global demand, but strong services exports have largely counterbalanced this, resulting in a Current Account Deficit (CAD) of 0.7% of GDP in FY24, an improvement from 2.0% in FY23.
Overall, the Economic Survey presents a positive outlook for India’s economy, with a strong foundation for growth and stability in the coming year.
