Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 on Monday, setting the stage for the upcoming Union Budget 2024-25. The survey highlights India’s economic resilience amidst global challenges, projecting a robust real GDP growth of 6.5 to 7 percent for the fiscal year 2024-25. It also underscores the government’s fiscal consolidation efforts and expectations for controlled inflation rates in the coming years.
The Economic Survey emphasizes India’s economic performance in FY24, noting a significant GDP growth rate of 8.2 percent, achieved consistently across three quarters. Despite external adversities, the economy maintained stability, supported by strong macroeconomic fundamentals. The survey points out that on the supply side, gross value added (GVA) expanded by 7.2 percent, reflecting broad-based growth across sectors. Fiscal management has been a cornerstone of India’s economic strategy, with the fiscal deficit of the Union Government narrowing from 6.4 percent of GDP in FY23 to 5.6 percent in FY24. This improvement was driven by robust tax revenues from direct and indirect taxes, buoyant non-tax revenues, and disciplined expenditure management. The composition of fiscal deficits over recent years indicates a shift towards higher capital outlays, enhancing the productivity of borrowed resources. Looking ahead, the survey acknowledges potential risks such as geopolitical tensions impacting global supply chains and commodity prices, which could affect inflation and monetary policy decisions. However, assuming normal monsoons and no major shocks, the Reserve Bank of India (RBI) projects headline inflation to be 4.5 percent in FY25 and 4.1 percent in FY26, aligning with international forecasts.
In conclusion, the Economic Survey 2023-24 paints a positive picture of India’s economic resilience and growth prospects amidst global uncertainties. The projected GDP growth rate of 6.5 to 7 percent for FY25 reflects confidence in domestic economic drivers and policy measures. As India prepares for the Union Budget 2024-25, the focus remains on sustaining growth momentum, enhancing fiscal stability, and navigating challenges to ensure inclusive and sustainable economic development.
Discussion about this post