The Indian economy has shown robust recovery and growth following the pandemic, with the real Gross Domestic Product (GDP) in 2023-24 being 20 percent higher than its pre-pandemic level of 2019-20, according to the Economic Survey 2023-24 presented in Parliament on Monday. This achievement is notable among major global economies.
The Economic Survey highlights positive growth prospects for fiscal year 2025, contingent on geopolitical, financial, and climatic risks. In 2023, global economic growth was reported at 3.2 percent by the International Monetary Fund (IMF). However, growth patterns varied significantly among countries due to domestic structural issues, varying exposure to geopolitical conflicts, and the effects of monetary policy adjustments.
Despite external challenges, India’s economy maintained its momentum from 2022-23 into 2023-24, with real GDP growth reaching 8.2 percent, surpassing the 8 percent mark in three out of four quarters. The Economic Survey attributes this steady performance to effective macroeconomic stability measures that minimized the impact of external factors.
The government’s focus on capital expenditure and sustained private investment has driven growth in capital formation, with Gross Fixed Capital Formation rising by 9 percent in real terms for 2023-24. The Survey also notes that healthier corporate and bank balance sheets will bolster private investment moving forward. Positive trends in the residential real estate market are also contributing to increased household sector capital formation.
Inflation, influenced by global issues, supply chain disruptions, and monsoon variability, has been effectively managed through administrative and monetary policies. Retail inflation decreased from an average of 6.7 percent in 2022-23 to 5.4 percent in 2023-24.
The fiscal balances of the general government have improved despite increased public investment, thanks to enhanced tax compliance, expenditure restraint, and greater digitization. The external balance faced pressure from weak global demand for goods, but strong services exports helped offset this, reducing the current account deficit (CAD) to 0.7 percent of GDP in 2023-24, down from 2.0 percent in 2022-23.
Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24, prepared by the Economic Division of the Department of Economic Affairs under the chief economic adviser’s supervision. Sitharaman is scheduled to deliver the Union Budget for 2024-25 tomorrow, marking her seventh budget presentation, surpassing the record set by former Prime Minister Morarji Desai.
