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The Government of India has presented its Economic Survey for the fiscal year 2024-25, revealing promising growth prospects for the Indian economy. Finance Minister Nirmala Sitharaman tabled the report in Parliament, highlighting that India's GDP is expected to grow between 6.5% and 7%, a significant rebound following the pandemic. This growth projection aligns closely with estimates from global agencies such as the International Monetary Fund (IMF) and the Asian Development Bank (ADB), although it is slightly lower than the Reserve Bank of India's forecast of 7.2% for the same period.
The Government of India has presented its Economic Survey for the fiscal year 2024-25, revealing promising growth prospects for the Indian economy. Finance Minister Nirmala Sitharaman tabled the report in Parliament, highlighting that India’s GDP is expected to grow between 6.5% and 7%, a significant rebound following the pandemic. This growth projection aligns closely with estimates from global agencies such as the International Monetary Fund (IMF) and the Asian Development Bank (ADB), although it is slightly lower than the Reserve Bank of India’s forecast of 7.2% for the same period.
Economic Recovery and Growth Drivers
The Economic Survey indicates that the Indian economy has shown remarkable resilience, with real GDP in FY24 being 20% higher than its level in FY20. This recovery is attributed to a combination of factors, including a reduction in unemployment rates and a strong focus on capital expenditure. The government’s efforts have resulted in a 9% increase in Gross Fixed Capital Formation in real terms during 2023-24, further enhancing the economy’s productive capacity.
The survey emphasizes the need for stronger partnerships between the government and the private sector to stimulate investment and job creation. It suggests that private sector investment is crucial for sustaining economic momentum, especially in light of geopolitical uncertainties and financial market conditions.
Inflation Management and Fiscal Health
In terms of inflation, the survey reports a decrease in retail inflation to 5.4% in FY24, down from 6.7% in FY23. This decline is attributed to effective policy measures implemented by the Central Government and the Reserve Bank of India, which have managed inflationary pressures stemming from global supply chain disruptions and domestic challenges. The survey also notes that 29 out of 36 states and Union Territories recorded inflation rates below 6%, reflecting improved price stability across the country.
Despite significant public investment, the fiscal balances of the general government have improved due to enhanced tax compliance and controlled expenditures. The government’s focus on digitization and procedural reforms has played a vital role in this fiscal consolidation.
Focus on Employment and Sectoral Growth
The Economic Survey outlines several critical areas for future focus, including job creation, skill enhancement, and leveraging the agricultural sector’s potential. It highlights the necessity of generating approximately 7.85 million jobs annually in the non-farm sector until 2030 to accommodate the growing workforce. The services sector has been a significant contributor to growth, with an estimated expansion of 7.6% in FY24.
Additionally, the survey points out the importance of encouraging research and development (R&D) and innovation across industries. Collaboration between industry and academia is essential to address skill shortages and enhance workforce capabilities.
Future Outlook and Challenges
Looking ahead, the Economic Survey conservatively projects GDP growth at 6.5-7% for FY25, with balanced risks. This projection takes into account potential challenges such as unfavorable weather conditions impacting agricultural production and global economic uncertainties that could affect exports. The Reserve Bank of India anticipates inflation to decrease further to 4.5% in FY25 and 4.1% in FY26, contingent upon normal monsoon conditions and the absence of external shocks.
In conclusion, the Economic Survey serves as a comprehensive assessment of India’s economic landscape, providing insights into current performance and future prospects. It underscores the need for collaborative efforts among the Union Government, State Governments, and the private sector to achieve sustainable growth and address ongoing challenges effectively. As India continues to navigate the post-pandemic recovery, the focus on structural reforms and investment in key sectors will be crucial for maintaining economic momentum.
