India’s Economy Projected to Grow 6.5%-7% Yearly in 2024/25, According to Government Sources

India’s Finance Minister presents the Economic Survey.

Projected Growth Rate: India’s economic survey is expected to project a growth rate of 6.5% to 7.0% for the financial year ending in March 2025.

Comparison with Central Bank Forecast: The projected growth rate is lower than the 7.2% forecasted by the country’s central bank.

With risks balanced and market expectations high, caution is warranted.

Increasing geopolitical uncertainties are expected to significantly impact capital flows.

The NHAI has released a list of 33 assets planned for monetization in FY25.

Corporations with excess profits should take responsibility for job creation in their own interest.

Forecast for normal rainfall suggests potential benefits for agriculture and could aid in revitalizing rural demand.

The global trade outlook for 2024 appears optimistic, with merchandise trade expected to recover after experiencing a contraction in volumes in 2023.

Private capital formation might become more cautious due to concerns about cheaper imports from countries with excess production capacity.

The medium- to long-term inflation outlook will depend on the improvement of price monitoring systems and market intelligence.

After strong growth over the past three years, private capital formation may become somewhat more cautious.

Concerns exist about cheaper imports from countries with excess production capacity.

Merchandise exports are expected to rise due to better growth prospects in advanced economies.

Services exports are likely to see continued growth.

GST and IBC have matured and are now delivering the expected results.

The Indian Rupee (INR) has fallen below 83.6650 against the U.S. Dollar, reaching a new record low.

Inflation and Economic Outlook:
   – Inflation is being managed effectively, with the Reserve Bank of India (RBI) forecasting headline inflation at 4.5% for FY25 and 4.1% for FY26.

   – The economy is currently performing robustly.

– It may be worth examining whether India’s inflation targeting framework should be adjusted.

Labor Market Improvement:
   – Over the past six years, labor market indicators have shown positive changes, including a reduction in the unemployment rate to 3.2% for the fiscal year 2022-23.

   – There is still room to speed up the enactment of labor codes by states.

Job Creation Needs:
   – To accommodate the growing workforce, the Indian economy must generate approximately 7.85 million jobs annually in the non-farm sector until 2030.

Enhancing Private Investment:
   – There is a strategic emphasis on increasing private sector investments to drive economic growth.

Growth of MSMEs:
   – There is a strong focus on expanding and supporting the growth of Medium, Small, and Micro Enterprises (MSMEs) in India, akin to the Mittelstand model.

Agriculture as a Growth Driver:
   – Agriculture is identified as a key growth sector, with efforts directed at eliminating policy barriers to harness its potential.

Green Transition Financing:
   – Securing financial resources is a priority for advancing India’s green transition initiatives.

The fiscal deficit is projected to decrease to 4.5% of GDP or lower by FY26.

Consumer Price Index Revision: The economic survey suggests that, based on the results of the Household Consumer Expenditure Survey, it may be appropriate to expedite the revision of the Consumer Price Index.

Supply Chain and FDI Options: India has two potential strategies: integrate into China’s supply chain or promote foreign direct investment (FDI) from China. Focusing on FDI from China appears to be more promising for enhancing India’s exports to the U.S.

Sustainable Growth Focus: The economic survey identifies key areas for sustainable growth, including private investment, support for small businesses, improvements in agriculture, and addressing the education-employment gap.

Farm Sector Recommendations: For the farm sector, the survey highlights the need to reduce disguised unemployment, address landholding fragmentation, and increase crop diversification.

Certainly! Here’s the rephrased breakdown without bold text:

Enhancing Private Sector Investment: The strategy aims to actively encourage and increase private sector investment to drive overall economic development and growth.

Support for MSMEs: There is a strategic focus on advancing the growth and expansion of Micro, Small, and Medium Enterprises (MSMEs), acknowledging their crucial role in the economic landscape.

Leveraging Agriculture for Growth: The government plans to harness the potential of the agricultural sector as a significant engine of growth by addressing and removing existing policy barriers.

Financing Green Transition: Emphasis is placed on securing necessary financing to support India’s transition towards greener and more sustainable practices, essential for long-term environmental protection.

Aligning Education with Employment: The strategy addresses the need to bridge the gap between educational outcomes and employment opportunities, ensuring the workforce acquires skills relevant to market demands.

Strengthening State Institutions: There is a concentrated effort to build the capacity and capability of state institutions to effectively implement policies and foster economic growth.

The India Economic Survey supports the use of export bans for non-essential agricultural commodities only under exceptional circumstances.

Economic Survey on the Stock Market

– The notable increase in retail investors in the stock market necessitates careful evaluation.

– There is a risk that overconfidence may lead to speculative behavior and inflated expectations of returns.

– The financial sector should grow in tandem with economic expansion.

– At its current stage of development, India cannot afford excessive financialization of its economy.

Tourism Revival: India’s travel and tourism sector is rebounding strongly post-pandemic, with a notable increase in foreign tourist arrivals (FTAs), as reported in the Economic Survey 2023-24.

Increase in FTAs: Over 92 lakh foreign tourists visited India in 2023, marking a 43.5% year-on-year increase.

Global Ranking: India is now ranked 39th in the World Economic Forum’s Travel and Tourism Development Index (TTDI) 2024.

Foreign Exchange Earnings: India earned over Rs 2.3 lakh crore from tourism, reflecting a 65.7% year-on-year increase in foreign exchange receipts.

Share of World Tourism: India’s share of global foreign exchange earnings from tourism grew from 1.38% in 2021 to 1.58% in 2022.