In FY25, India's GDP is predicted to expand by 6.5-7%, per the Economic Survey, which was made public on Monday. According to the report, "market expectations are on the higher side."
While the Reserve Bank of India's prognosis of 7.2% is higher than the survey's, other institutions such as the Asian Development Bank (ADB) and the International Monetary Fund (IMF) have anticipated 7.0%. According to the poll, amid apprehensive global economic performance, India's development factors have bolstered economic growth in FY24. Exports of goods and services are probably going to increase this year.
It added that structural reforms like the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) have "matured" and are "delivering envisaged results." "A normal rainfall forecast by the India Meteorological Department and the satisfactory spread of the southwest monsoon thus far are likely to improve agriculture sector performance and support the revival of rural demand," the statement read. However, the report did point out that the monsoon still has "some ways to go," so the private sector should exercise prudence.
"Private capital formation, after good growth in the last three years, may turn slightly more cautious because of fears of cheaper imports from countries with excess capacity," it stated. "Considering these factors, the survey conservatively projects real GDP growth of 6.5–7 per cent, with risks evenly balanced, cognizant of the fact that market expectations are on the higher side," stated the report.
The Economic Survey also said that, as of Q4FY24, the GDP level is nearly back to its pre-pandemic trajectory. According to the poll, investors' bets on a global economic recovery have caused the world's financial markets to reach all-time highs in the last year.
"However, any corrections in the elevated financial market valuations may have ramifications for household finances and corporate valuation, negatively impacting growth prospects," it stated. Additionally, it said that recruiting in the field of information technology (IT) has decreased in FY24. This year, it might not drop any more, but "it is unlikely to pick up significantly."
Every year, the government reviews the status of the economy in a document called the Economic Survey, which is submitted before the Union Budget. It gives a broad assessment of the economy's short- to medium-term prospects. Under the direction of the chief economic adviser, the Economic Division of the Department of Economic Affairs of the Ministry of Finance prepares the Economic Survey.
The first Economic Survey was published in 1950–1951 and was once included in the budgetary papers. It was presented the day before the budget was presented in the 1960s after being taken out of the Union Budget. On July 23, Nirmala Sitharaman, the Finance Minister, will introduce the Union Budget for 2024–25.
