The Indian government remains optimistic about the country's economic growth for the fiscal year 2023-24, expecting it to exceed the forecasted 6.5 percent despite potential risks from external factors. The Finance Ministry's half-yearly economic review report points to the better-than-anticipated growth in the second quarter of the fiscal year, positioning India as the fastest-growing major economy in the first half of FY24.
Indicators from October and November 2023 exhibit robust economic activity, with PMI for Manufacturing and Services sectors showing consistent expansion. Both the Index of Industrial Production (IIP) and the Index of Eight Core Industries highlight sustained growth in manufacturing.
The services sector, especially the tourism and hotel industry, is witnessing an upswing due to increased leisure and business travel along with social events, contributing to positive sentiments.
The report emphasizes the continuation of growth in consumption demand, both in urban and rural areas. Urban demand remains strong, evident in increased auto sales, fuel consumption, and UPI transactions. Meanwhile, rural areas are catching up, indicated by robust growth in two and three-wheeler sales.
Inflation appears to be on a declining trend, primarily supported by stable core inflation and deflation in fuel prices. The Reserve Bank of India (RBI) has projected an average inflation rate of 5.4 percent for FY24, despite occasional disruptions in food prices.
The external sector outlook is promising, with positive trade balances in both services and merchandise observed in November. A stable Indian rupee against major currencies and adequate foreign exchange reserves add to the positive outlook.
Foreign investment inflows, particularly in portfolio investments, have seen a resurgence since November 2023, contributing to the climb in Indian stock market indices. This optimism among domestic and foreign investors reflects a broad-based positive sentiment regarding India's growth prospects.
(With Agency Inputs)
ALSO READ | Fiscal Deficit Reaches Rs 9.07 Lakh Crore for April-November Period
ALSO READ | Market Surges to New Highs, Oil & Gas Stocks Lead with Strong Performance
