India’s real GDP projected to grow between 6.5–7% in 2024-25

India’s real GDP is projected to grow between 6.5-7% in 2024-25, according to the Economic Survey 2023-24 presented in Parliament by Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman. The survey highlighted domestic growth drivers that supported economic growth in FY24, with real GDP being 20% higher than pre-COVID FY20 levels. India grew at an average annual rate of 6.6% during the decade ending FY20, reflecting long-term growth prospects. However, the Survey cautioned that geopolitical conflicts in 2024 could lead to supply disruptions, higher commodity prices, and inflationary pressures, potentially impacting RBI’s monetary policy. The global trade outlook for 2024 remains positive, with merchandise trade expected to rebound after a contraction in 2023. The Survey also noted that leveraging government initiatives and emerging market potential can expand business, consultancy, and IT-enabled services exports. Despite core inflation around 3%, the RBI has kept interest rates unchanged, delaying anticipated easing.

The survey reported that India’s economy showed resilience to global challenges, with real GDP growing by 8.2% in FY24, driven by stable consumption and improving investment demand. The shares of the agriculture, industry, and services sectors in overall GVA at current prices were 17.7%, 27.6%, and 54.7%, respectively, in FY24. Manufacturing GVA grew by 9.9% in FY24, benefiting from reduced input prices and stable domestic demand. Construction activities grew by 9.9% due to infrastructure development and strong real estate demand. High-frequency indicators like GST collections and e-way bill issuance demonstrated double-digit growth in FY24. Private non-financial corporations' Gross Fixed Capital Formation (GFCF) increased by 19.8% in FY23, with sustained momentum in FY24. Residential real estate sales 2023 were the highest since 2013, growing 33% YoY, with 4.1 lakh units sold in the top eight cities. With cleaner balance sheets and adequate capital buffers, the banking and financial sector is well-positioned to meet growing financing needs.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.