Union Finance Minister Nirmala Sitharaman presented the Economic Survey in Parliament on July 22, showing an 8.2% GDP growth in FY24 – India’s third consecutive year of over 7% growth, driven by stable consumption and increasing investment demand.
Despite global economic challenges, the survey highlighted a resilient Indian economy, maintaining strong growth due to consistent consumer demand and investment. However, the IT sector faces hiring slowdowns, with significant job creation declines expected in FY24.
The survey also noted substantial growth in engineering, research, and development Global Capability Centres (GCC), with a 30% increase to about $25 billion in FY22-23. In contrast, the IT and BPM sectors grew on a smaller scale but at a faster percentage rate.
Furthermore, the Indian economy must generate approximately 78.51 lakh non-farm jobs annually to support population growth. India’s workforce dynamics are changing, with an increasing female labor force participation and a decreasing unemployment rate, now at 3.2% as of FY23.
10 key highlights of the Indian economy’s annual report are:
- Resilient Indian Economy
India’s economy demonstrated resilience, growing over 7% for the third year, driven by stable consumer demand and improving investments. GVA increased by 7.2%, and net taxes rose by 19.1% in FY24.
- Stable Banking Sector
India’s banking sector showed remarkable strength in FY24, achieving double-digit growth in bank credit and the lowest levels of non-performing assets in years, reflecting strong banking health.
- Core Inflation Reduction
Core inflation dropped to a nine-year low, with measures by the government and RBI keeping retail inflation at 5.4%, the lowest since the pandemic began.
- Concerning Food Inflation
Food inflation remained a challenge, climbing to 7.5% in FY24 due to adverse weather, reservoir depletion, and crop damage, impacting agriculture.
- Positive Inflation Outlook
Short-term inflation prospects are favorable, with projections of falling to 4.5% in FY25 due to normal monsoon and stable external factors, as forecasted by RBI, IMF, and the World Bank.
- Growth Strategy for New India
Emphasizing bottom-up reforms and governance improvements to achieve sustainable, balanced, and inclusive growth. Priorities include job creation, agriculture potential, and green transition financing.
- Slowdown in FDI Inflows
FDI inflows decreased to $26.5 billion in FY24 from $42 billion in FY23, influenced by global economic uncertainties and geopolitical tensions.
- Doubling Energy Needs by 2047
India’s energy requirements are expected to double by 2047 to support economic development, necessitating a balanced approach to climate resilience and renewable energy expansion.
- Focus on Quality in Skill Development
Employment quality has improved with a lower unemployment rate and increased formal job creation. Emphasis on balancing technology use with employment opportunities.
- Sectoral Performance
The agriculture sector grew by an average of 4.18% annually over five years. Industrial growth was robust at 9.5% in FY24, with significant contributions from manufacturing, construction, mining, and the services sector.
