Union Finance Minister Nirmala Sitharaman presented the Economic Survey for 2023-2024 in the Lok Sabha, revealing a promising growth forecast for India’s economy. According to the survey, India’s real GDP is projected to expand between 6.5% and 7% for the fiscal year 2024-25. This forecast aligns closely with the International Monetary Fund’s (IMF) estimate of 7% growth, indicating a robust economic outlook.
The survey highlights that while the growth projection is optimistic, it is tempered with caution. It acknowledges the balanced risks involved and market expectations that are slightly more optimistic. “The survey conservatively projects a real GDP growth of 6.5–7 per cent, with risks evenly balanced, cognizant of the fact that the market expectations are on the higher side,” the report states.
Inflation remains a significant concern, with core inflation staying stubborn due to persistent service sector inflation and a strong labor market across many Asian economies. The survey notes, “Inflationary pressures stoked by global troubles, supply chain disruptions, and vagaries of monsoons have been deftly managed by administrative and monetary policy responses.” It also points out that retail inflation, which averaged 6.7% in FY23, has moderated to 5.4% in FY24.
A key highlight of the survey is the emphasis on capital expenditure and private investment. The report reveals that “the government’s thrust on capex and sustained momentum in private investment has boosted capital formation growth,” with Gross Fixed Capital Formation increasing by 9% in real terms for 2023-24.
The survey elaborates on the government’s strategic responses to the economic challenges posed by the pandemic. It underscores three main components of India’s economic strategy: heightened public spending on infrastructure, which bolstered job creation and industrial output; strengthened financial and non-financial private sector balance sheets supported by government and Reserve Bank of India initiatives; and the natural adaptive responses of business enterprises and public administration during adversities.
Overall, the Economic Survey 2023-2024 presents a cautiously optimistic view of India’s economic trajectory, reflecting both the resilience and the strategic measures adopted to navigate ongoing global and domestic challenges.