Economic Survey 2024: India’s Real GDP Growth at 8.2% in FY24

India’s economy maintained its robust growth from FY23 into FY24, overcoming numerous external challenges. The Economic Survey 2024 reveals that India’s real GDP increased by 8.2 percent in FY24, surpassing the 8 percent mark in three out of four quarters.

Finance Minister Nirmala Sitharaman presented the annual survey in Parliament on Monday, marking the beginning of the Budget session.

The survey highlights that a focus on macroeconomic stability minimized the impact of external challenges on India’s economy.

Key Highlights from the Economic Survey on Economy and Growth

In 2023, the global economic landscape showcased diverse growth patterns. The April World Economic Outlook reported a global growth rate of 3.2 percent. However, this figure conceals a complex mix of domestic structural issues, geopolitical conflicts, and the effects of monetary policy tightening that resulted in varied growth trajectories among countries.

India’s push on capital expenditure and sustained private investment momentum boosted capital formation growth. Gross Fixed Capital Formation rose by 9 percent in real terms in 2023-24.

Moving forward, healthier corporate and bank balance sheets are expected to further enhance private investment. Positive trends in the residential real estate market indicate a significant increase in household sector capital formation.

Inflationary pressures from global disruptions, supply chain issues, and monsoon variability have been managed effectively through administrative and monetary policy responses. Consequently, retail inflation, which averaged 6.7 percent in FY23, declined to 5.4 percent in FY24.

The general government’s fiscal balances have improved progressively despite expansionary public investment. Gains in tax compliance, driven by procedural reforms, expenditure restraint, and increasing digitization, helped achieve this balance.

Despite subdued global demand for goods, strong services exports largely counterbalanced the external balance. As a result, the Current Account Deficit (CAD) stood at 0.7 percent of GDP in FY24, an improvement from the 2.0 percent deficit of FY23.

India’s economy has recovered and expanded in an orderly fashion post-pandemic. The real GDP in FY24 was 20 percent higher than its level in FY20, a feat achieved by only a few major economies. Prospects for continued strong growth in FY25 look promising, subject to geopolitical, financial market, and climatic risks.