India’s GDP growth rate was predicted by the Economic Survey, presented to Parliament on Monday by Finance Minister Nirmala Sitharaman, to be between 6.5 and 7 percent for 2024–2025 because the country’s economy is doing well.
According to the survey, the April World Economic Outlook predicts 3.2% global economic growth in 2023.
Different countries have developed different growth patterns. The influence of tighter monetary policy, uneven vulnerability to geopolitical events, and internal structural concerns have all contributed to the severe differences in the growth performance of nations.
In FY24, India’s economy maintained the momentum it had established in FY23, despite a variety of external obstacles. In FY24, India’s real GDP expanded by 8.2%, surpassing the 8% growth threshold in three of the four quarters. India’s economy was spared the worst effects of external problems thanks to the emphasis on preserving macroeconomic stability.
Growth in capital formation has been aided by the government’s push for capital expenditures and the ongoing momentum in private investment. In real terms, gross fixed capital formation grew by 9% in 2023–2024.
Better bank and company balance sheets in the future will support private investment even more. According to the report, the home sector’s capital formation is greatly rising due to the favorable trends in the residential real estate market.
Administrative and monetary policy measures have skillfully controlled inflationary pressures that have been fueled by global issues, supply chain disruptions, and monsoon fluctuations. Consequently, it continues, retail inflation fell to 5.4% in FY24 from an average of 6.7% in FY23.
Despite increased public spending, the general government’s fiscal balances have gradually improved. It continues, “India achieved this fine balance in tax compliance thanks to gains in spending restraint, increasing digitization, and procedural reforms.”
The weakening global demand for goods has put strain on the external balance, but robust services exports have more than offset this. Consequently, the FY24 Current Account Deficit (CAD) was less than the FY23 deficit of 2.0 percent of GDP, coming in at 0.7% of GDP.
