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“7 percent of GDP growth can be achievable for India this fiscal year.”- Reserve Bank of India(RBI)
The global economic disruption in the last few years was severe but spaced out in time. Since 2020, the world’s economy has been hit at least three times by incidents like COVID-19, the Ukraine-Russia war, to name a few. The Indian economy, however, appears to have moved on positively and staged a full recovery in FY22. It was also the year when India faced the challenges of limited exports and high inflation. In February 2023, the Reserve Bank of India(RBI) predicted that India could achieve a GDP growth of 7% in the next fiscal year. However, RBI also said that this GDP growth will depend on the measures taken by the Centre in the Union Budget.
In the statement released by the RBI, it is mentioned, ‘taking the economic survey’s growth projection of 6.5% as the base, the Union Budget’s tax, capex and fiscal consolidation proposals can take India’s real GDP growth close to 7% in FY24 if they are effectively implemented.’
This projection in the survey is comparable with the estimates provided by multilateral agencies like the World Bank, IMF, ADB, and RBI.
India’s Rapid Economic Growth In FY 2023
As per the data shared by India’s National Statistical Office(NSO), India’s economic growth rate in July-September was 7.6 per cent. In the recent data released by the NSO, the first advance estimates of GDP are incorporated with the industrial production data for an additional month of October, and the lead indicator implies an estimated growth of 6.5 for this fiscal year.
According to the S&P Global Market Intelligence report, India is set to be the fastest-growing economy in the G20 grouping of large nations.
Snapshot of India’s Economic Growth
The optimistic economic growth of India profounds the different sectors in which the country recorded stellar growth. According to the Press Information Bureau of India, India will witness a GDP growth of 6-6.8 per cent in the fiscal year 2023-24. Based on the previous data, India’s growth per fiscal deficit improves over the year. It was 4.7% in FY 2019-20 and stood at 6.4% in FY 2022-23.
In the PIB’s economic survey, it was clearly shown that foreign exchange reserves increased in the last five years. In FY 2019-20, the foreign exchange reserves in India were $478 billion, which increased to 563 in FY 2022-23.
Predicted Growth Trajectory Favours India
In 2019, Honourable Prime Minister Narendra Modi set a target of making India USD 5 trillion economy by 2025. With the government strategies and various schemes to promote local businesses and MSME, the previous and predicted growth trajectory favours India. India’s servicing sector recorded massive growth and supported the Indian government’s vision to achieve a trillion-dollar economy.
- PMI services in India witnessed a strong expansion from July 2022.
- Service sectors grew at the rate of 46% in the last three years.
- Credit growth services went above 15% in the previous fiscal year.
- Fashion, general merchandise, and grocery are expected to capture nearly two-thirds of the Indian e-commerce market by 2027.
- 75 new digital banks were announced in 2023 to extend financial services across different states of India.
Schemes And Policies
As per the analysts of the Financial Express, India’s GDP growth in the next fiscal year is also backed by the government’s schemes and policies.
In the press release, the Asian Development Bank(ADB) country director for India, Takeo Konishi, said, “The Government of India’s strong infrastructure push under the Prime Minister’s Gati Shakti (National Master Plan for Multimodal Connectivity) initiative, logistics development, and industrial corridor development will contribute significantly to raising industrial competitiveness and boosting future growth.”
The physical and digital infrastructure is expected to be the major factor in India’s GDP growth. The government has various schemes and policies to boost the country’s economic growth.
- PM Gatishakti National Master Plan for the seamless movement of goods and people.
- National Logistics Policy for making Indian logistics competitive globally.
- National Investment Pipeline has a potential investment of Rs 9 Lakh crore.
- Open Network For Digital Commerce in the pipeline.
- UPI transactions touched their highest-ever mark of Rs 782 crore transactions in December 2022.
India’s GDP and other metrics growth trajectory is a positive sign for businesses and individuals. Based on the predicted data and government initiatives, a GDP growth of 7% looks possible for India.
