India’s economic outlook for the fiscal year 2024-25 is optimistic, with Union Finance Minister Nirmala Sitharaman projecting a real GDP growth rate of 7.2 percent. This announcement was made at the 50th International Monetary and Financial Committee (IMFC) meeting on October 26. The Press Trust of India reported on the finance minister’s detailed presentation of the nation’s economic drivers and future goals.
Key Drivers of Growth: Investment and Consumption
Sitharaman emphasized that the projected growth is primarily driven by robust investment and consumption. The government’s strategic focus on these areas is anticipated to significantly boost economic activity, creating a favourable environment for sustained growth.
Commitment to Inclusive Growth and Long-Term Vision
Aligning with India’s vision of becoming a high-income economy by 2047, Sitharaman reiterated the government’s commitment to inclusive growth and social empowerment. She highlighted India’s goal of achieving USD one trillion in merchandise exports by 2030. This ambitious target will be supported by improved logistics, trade reforms, and deeper integration into global value chains, enhancing India’s global trade footprint.
Fiscal Discipline and Revenue Growth
The finance minister also discussed India’s adherence to fiscal discipline. The country has met its budgeted gross fiscal deficit target of 5.6 percent of GDP for 2023-24, with a planned reduction to 4.9 percent for the upcoming fiscal year. Central government revenue expenditure rose by 9.6 percent during July-August, recovering from a 1.5 percent contraction in the previous quarter, indicating a strong fiscal position.
Rising Female Labour Force Participation
A notable achievement highlighted by Sitharaman was the increase in female labor force participation, which surged from 23.3 percent in 2017-18 to 37 percent in 2022-23. This significant improvement is expected to enhance economic productivity and contribute to social development, marking a positive trend in India’s labor market dynamics.
Positive Investment Trends and Infrastructure Development
Investment trends in India signal positive momentum, with central government capital expenditure rising by 25.8 percent in July-August 2024. This focus on infrastructure development is anticipated to attract more private investment, further stimulating economic activity. Such investments are crucial for building a resilient economy capable of sustaining long-term growth.
Complete Electrification of Villages
Sitharaman also celebrated the milestone of complete village electrification across India. Reflecting on the substantial progress since 2014, she stated, “I don’t think any village in India is unelectrified today.” This achievement underscores the government’s dedication to improving basic infrastructure and enhancing the quality of life in rural areas.
A Bright Economic Future
Finance Minister Nirmala Sitharaman’s confidence in India’s economic trajectory underscores the nation’s strategic focus on investment, infrastructure, and inclusive growth. These elements are critical for achieving the ambitious economic goals set for the future. As India continues on this path, market participants and global investors will be closely monitoring these developments to make informed investment decisions, reinforcing India’s position as a key player in the global economy.
(With inputs from agencies)
