Economic Survey 2024: India’s economy carried forward the momentum it built in FY23 into FY24 despite a gamut of external challenges. India’s real GDP grew by 8.2 per cent in FY24, exceeding 8 per cent mark in three out of four quarters of FY24, stated Economic Survey 2024.
Finance Minister Nirmala Sitharaman tabled the annual survey in the Parliament on Monday with the start of the Budget session.
The survey added that the focus on maintaining macroeconomic stability ensured that external challenges had minimal impact on India’s economy.
Here’s what the Economic Survey Revealed About the Economy and Growth
In 2023, the global economic landscape was a tapestry of varied growth patterns. According to the April World Economic Outlook, global economic growth stood at 3.2 percent. However, this seemingly uniform figure masked a complex array of domestic structural issues, uneven exposure to geopolitical conflicts, and the ripple effects of monetary policy tightening that led to divergent growth trajectories among countries.
The Government’s thrust on capex and sustained momentum in private investment has boosted capital formation growth. Gross Fixed Capital Formation increased by 9 per cent in real terms in 2023-24.
Moving forward, healthier corporate and bank balance sheets will further strengthen private investment. The positive trends in residential real estate market indicate that the household sector capital formation is increasing significantly.
Inflationary pressures stoked by global troubles, supply chain disruptions, and vagaries of monsoons have been deftly managed by administrative and monetary policy responses. As a result, after averaging 6.7 per cent in FY23, retail inflation declined to 5.4 per cent in FY24.
The fiscal balances of the general government have improved progressively despite expansionary public investment. Tax compliance gains driven by procedural reforms, expenditure restraint, and increasing digitisation helped India achieve this fine balance.
The external balance has been pressured by subdued global demand for goods, but strong services exports largely counterbalanced this. As a result, CAD stood at 0.7 per cent of the GDP during FY24, an improvement from the deficit of 2.0 per cent of GDP in FY23.
Indian economy has recovered and expanded in an orderly fashion post pandemic. The real GDP in FY24 was 20 per cent higher than its level in FY20, a feat that only a very few major economies achieved. Prospects for continued strong growth in FY25 beyond look good, subject to geopolitical, financial market and climatic risks.
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