Indian economy's outlook bright: Economic Survey

The Economic Survey 2023-24 that was released by the Ministry of Finance on Monday projected a real GDP growth of 6.5-7% for the financial year 2024-25 (FY25).

However, the government said in this survey that the corporate sector in India has been posting impressive financial performances, but recruitment and salary growth of employees have not kept up with the companies' profit.

Finance Minister Nirmala Sitharaman said the Indian economy was on a "strong wicket and stable footing" and resilient in the face of geopolitical challenges. The economy has consolidated post-Covid recovery with policymakers - fiscal and monetary - ensuring economic and financial stability, she said.

"The Survey conservatively projects a real GDP growth of 6.5–7 percent, with risks evenly balanced, cognisant of the fact that the market expectations are on the higher side," said the Economic Survey 2023-24.

The Survey mentioned that the economy's outlook is bright and has carried forward the momentum it built in FY23 into FY24. “India’s economy carried forward the momentum it built in FY23 into FY24 despite a gamut of global and external challenges. The focus on maintaining macroeconomic stability ensured that these challenges had minimal impact on India’s economy," said the survey.

"As a result, India’s real GDP grew by 8.2 percent in FY24, posting growth of over 7 percent for a third consecutive year, driven by stable consumption demand and steadily improving investment demand. On the supply side, gross value added (GVA) at 2011-12 prices grew by 7.2 percent in FY24, with growth remaining broad-based. Net taxes at constant (2011-12) prices grew by 19.1 percent in FY24, aided by reasonably strong tax growth, both at the centre and state levels and rationalisation of subsidy expenditure. This led to the difference between GDP and GVA growth in FY24,” said the Economic Survey 2023-24.

The survey claimed that the annual unemployment rate in India has been decreasing. According to the annual Periodic Labour Force Survey (PLFS), the unemployment rate for individuals aged 15 and above has been falling since the pandemic.

The Economic Survey said that as supply chain disruptions lessened and the energy and food price spikes caused by the Russia-Ukraine conflict subsided, overall inflation rates fell in many countries.

After reaching its highest point in 2022, inflation significantly decreased throughout 2023. Despite this improvement, inflation remains above target levels in several nations. The reduction in supply chain pressures for tradeable goods in 2023 contributed to a notable decrease in goods inflation, easing logistical issues.