India’s economy grew by 8.2% in the 2023-24 financial year, exceeding analysts’ expectations
The Indian economy is set to grow by between 6.5% and 7% during the current financial year and by around 7% per annum going forward, according to the latest economic forecast presented to the country’s parliament.
The outlook was contained in a comprehensive report on the state of the nation’s economy ahead of the federal budget for the next financial year, which will be announced by Finance Minister Nirmala Sitharaman on Tuesday.
It will be the first budget of the newly elected National Democratic Alliance (NDA) coalition government led by Prime Minister Narendra Modi. In the recent elections, the NDA secured the majority of seats in the 543-seat lower house of parliament.
The previous government, in which Sitharaman also held the post of finance minister, had announced an interim budget earlier this year. The latest economic survey, revealed on Monday, warned that the escalation of geopolitical conflicts in 2024 could lead to “supply dislocations, higher commodity prices, reviving inflationary pressures and stalling monetary policy easing.”
“The Indian economy is on a strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges,” the survey stated. It added that the inflation rate is “largely under control,” even if the rate in respect of some specific food items “is elevated.”
The document emphasized that the Indian economy could grow at a rate of over 7% on a sustained basis in the medium term by building on the past decade’s reforms.
The survey “conservatively” projected GDP growth of between 6.5% and 7%, in line with projections by most global credit rating agencies. It identified job creation as one of the key priorities for the federal government, and highlighted the need for the corporate sector to create more employment. Addressing economic challenges will require collaboration between government and the private sector “to reboot the mission to skill and equip Indians to catch up with and get ahead of technological evolution,” the document noted.
According to the survey, 65% of India’s population is under the age of 35, and many lack the skills needed by a modern economy. Only 51.25% of the country’s young people are considered employable.
India’s economy grew by 8.2% in the 2023-24 financial year, compared to 7% in the previous period, exceeding analysts’ expectations, government data showed last month. The country’s robust growth has been largely attributed to a strong rebound in the manufacturing sector and a continuing surge in construction and services.
The Indian economy is the fifth largest in the world and is also among the fastest growing. The South Asian country leapfrogged the UK in the rankings of the biggest global economies in 2022. It is now expected to overtake Germany and Japan to become the third-largest economy by the end of the decade. It is also expected to become a $5 trillion economy within the same period.
Despite a steady growth in GDP, the South Asian country has witnessed a dip in foreign direct investment, falling from $47.6 billion in the last financial year to $45.8 billion in 2023-24.
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