On Monday, Finance Minister Nirmala Sitharaman presented the Economic Survey 2023/24 in Parliament, just one day before unveiling her record seventh union budget. She described the Indian economy as being on a “strong wicket and stable footing,” showing resilience amid geopolitical challenges.
The Economic Survey noted that the Indian economy is solidifying its post-COVID recovery, with both fiscal and monetary policies ensuring economic and financial stability. For FY24, the growth is projected at 8.2 percent, with the economy surpassing the 8 percent mark in three of four quarters. Sitharaman expects the momentum from FY23 and FY24 to carry into FY25, with anticipated growth between 6.5 and 7 percent. Headline inflation, projected by the Reserve Bank at 4.5 percent in FY25 and 4.1 percent the following year, is considered “under control,” though food inflation has risen.
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Food inflation increased from 6.6 percent in FY23 to 7.5 percent in FY24, primarily due to adverse weather conditions that hindered production. The report also highlighted challenges faced by farmers due to extreme weather events and depleted reservoirs.
Retail inflation decreased from an average of 6.7 percent in FY23 to 5.4 percent in FY24, thanks to the government’s “timely policy interventions and the RBI’s measures for price stability.” This marks the lowest inflation level since the pandemic. However, the Economic Survey emphasized that for this period of high recovery to be sustained, significant efforts are required domestically, as a complex global environment has made it challenging to reach agreements on crucial issues such as trade, investment, and climate change.
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