Economic Survey 2023-24: India’s Growth Projection Revised
Finance Minister Nirmala Sitharaman presented the Economic Survey for the fiscal year 2023-24 (FY24) on Monday. While the survey acknowledged that the Indian economy surpassed market expectations in the previous fiscal year (FY24), it forecasted a slowdown in growth for the upcoming fiscal year 2024-25 (FY25).
Growth Projection for FY25
The survey projects a growth rate of 6.5% to 7% for the Indian economy in FY25. This is lower than the 8.2% GDP growth rate achieved in FY24.
Medium-Term Outlook
The survey highlights that sustained 7%+ economic growth is possible with ongoing structural reforms. However, it emphasizes the need for collaboration between the Union Government, State Governments, and the private sector.
Challenges and Risks
The survey warns that geopolitical tensions escalating in 2024 could disrupt supply chains, leading to higher commodity prices, inflationary pressures, and reduced capital flows. This could force central banks to adopt stricter monetary policies.
Employment and Services
Hiring patterns are not expected to improve significantly, particularly in the IT sector. However, the survey predicts further growth in exports of business, consulting, and IT-enabled services due to government initiatives.
FY24 Economic Performance
In FY24, the economy grew by over 8% in three out of four quarters, with macroeconomic stability mitigating the impact of external shocks.
Medium-Term Goals
The survey emphasizes the importance of bottom-up reforms and strengthening structural reforms to foster sustainable, balanced, and inclusive economic growth. It highlights various global trends that will shape the medium-term outlook, including geo-economic fragmentation, self-reliance, climate change, technological advancements, and limited policy space.
