Recently, in 2023-24, the following key indicators highlighted improved performances:

• Private consumption stood at 57.9% of the nominal GDP in fourth quarter of FY24, compared to 63.5% in the previous quarter. The growth in the private consumption remained muted mainly due to the factors like subdued monsoon and persistent food inflation.
• The agricultural sector maintains robust growth, showing positive advancements in Rabi sowing, where the cultivated area has expanded from 709.09 lakh hectares in 2022-23 to 709.29 lakh hectares in 2023-24 (as on February 1, 2024). To enhance production and bolster farmers' income, elevated Minimum Support Prices (MSPs) have been declared for the upcoming Rabi Marketing Season (RMS 2023-24), ranging from 2.0 to 9.1%. The area sown under the kharif crops also expanded by 8.9% compared to the same period last year, as of May 10, 2024. Crops like rice, Shree anna, coarse cereals, pulses and oilseeds contributed to this increase, which might lead to rise in the production.
• CPI inflation increased to 3.65% in August 2024 from 3.60% in July 2024.
• PMI Services decreased to the levels of 51.5 in August 2024 as compared to 61.1 in July 2024.
• The consumption of petroleum products during FY25 (April-August 2024) stood at 99.181 MMT in volume terms.
• Quick Estimates for India's Index of Industrial Production (IIP) for July 2024 stood at 149.6 against 150.0 for June 2024.
• The combined index of eight core industries stood at 163.9 for FY25 (April-July) against 154.4 for FY24 (April-July).
• Cargo traffic handled at major ports stood at 348.09 million tonnes (MMT) during April-August FY25.
• Railway freight traffic stood at 126.97 million tonnes in August 2024.
• During April 2024-July 2024 (2024-25), air freight movement increased by ~15% to 1,227.494 thousand tonnes compared to 1,067.685 thousand tonnes in April 2023-July 2023 (2023-24) period.
• A total of 10.5 crore e-way bills were raised in July 2024.
• India registered a broad-based expansion of 7% in FY23, supported by robust domestic demand and upbeat investment activity. Sectoral analysis reveals that growth was driven by demand from the services sector, and enhanced agriculture export activity was aided by increased infrastructure investment. Private consumption has peaked, marking the highest level during all second quarters in the last 11 years, accounting for 60.6% of the Gross Domestic Product (GDP). The investment rate also rose to be the highest among all the second quarters since 2012-13 at 34.6% of GDP, hinting at the beginnings of an investment cycle.
• In August 2024, gross GST revenue collection reached 1.75 lakh crore (US$ 20.98 billion), marking a 10% year-on-year growth; positive trends were observed across components including CGST, SGST, IGST, and Cess collections, with significant inter-governmental settlements contributing to revenue distribution among states/UT.
• In September 2024, the Indian basket of crude oil reached US$ 73.59 a barrel, compared to US$ 78.27 in August 2024.
• In August 2024, UPI volume stood at 14,963.05 million transactions worth Rs. 20.60 lakh crore (US$ 247.03 billion).
• Merchandise exports during FY25 (April-August 2024) stood at US$ 178.68 billion.
• The average daily net injection under the liquidity adjustment facility (LAF) stood at Rs. 1.52 lakh crore (US$ 18.26 billion) during July 16 to August 6, 2024.
• In FY25, as of September 6, 2024, foreign exchange reserves in India stood at US$ 689.235 billion.
• As of September 6, 2024, the currency in circulation (CIC) registered Rs. 34.70 lakh crore (US$ 416.03 billion).
• Rupee strength reached Rs. 83.61/US$ as of September 19, 2024.
• The total foreign direct investment (FDI) equity inflow received by India in FY25 (April to June 2024) amounted to US$ 16.17 billion.
• According to RBI:
  • Bank credit stood at Rs. 168.14 lakh crore (~US$ 2.02 trillion) as of July 26, 2024.
  • Credit to non-food industries stood at Rs. 167.86 lakh crore (~US$ 2.0 trillion) as of July 26, 2024.

India's economy outpaced other economies during the first half of FY24, propelled by robust demand and increased investment. As of June 2024, the annual retail price inflation in India rose to 5.08%, an increase from the previous month, staying within the tolerance band set by the Reserve Bank of India (RBI). The real investment rate during Q2 of FY23, prevailing at a high level of 34.6%, demonstrates the Government's continued commitment towards asset creation.

An overall rise in Rabi coverage with adequately filled irrigation reservoirs played a pivotal role in the agricultural output growth in 2022-23. An increase in minimum support prices for both Kharif and Rabi crops in 2022-23 and progress in rice procurement have already been supplementing rural incomes in the country. Higher incomes have further resulted in an increase in sales of passenger vehicles, two and three-wheelers, and tractors by a good year-on-year margin in January. The increase in GST collection, the strong generation of e-way bills, and the growth in e-toll collection serve as reaffirmations of the resilience within economic activity.

In addition, steady growth momentum in service activity continues with healthy PMI levels during October to January, attributing to the growth in output and accommodating demand conditions, leading to a sustained upturn in sales. The growth impetus in rail freight and port traffic remains upbeat, with further improvement in the domestic aviation sector. Strong growth in fuel demand, domestic vehicle sales, and high UPI transactions also reflect healthy demand conditions.

Capital expenditure by the Government during April-February FY24 amounted to Rs. 8.1 lakh crore (US$ 97.03 billion).

The Interim Budget for FY25 emphasizes four pivotal areas: (i) Empowering the poor (“Garib Kalyan, Desh ka Kalyan”), elevating them from poverty, reaching marginalized groups, including street vendors, tribal communities, artisans, and transgender persons, to ensure inclusive growth and leave no one behind; (ii) Welfare of farmers (“Annadata”) by providing direct financial aid, fostering inclusive growth and productivity through farmer-centric policies, income support, risk coverage, and technology promotion; (iii) Empowering the youth (“Amrit Peedhi, the Yuva”) for nation's prosperity by focusing on quality education, holistic development, and fostering entrepreneurial aspirations; and (iv) Empowerment of women (“Momentum for Nari Shakti”) through ease of living, increased participation in workforce and facilitating entrepreneurship.

Strengthening the banking and financial sector is evident, given the stability in foreign direct investment (FDI) inflows, a resurgence in Foreign Portfolio Investment (FPI) inflows, and ample foreign exchange reserves providing a robust import cover of 9 months. The external front remains resilient, contributing to the commendable performance of the INR compared to other Emerging Market Economies (EMEs).

India's services exports demonstrated robust performance during April-July period of FY25 with an estimated value of services export amounting to US$ 117.35 billion, registering ~9.88% growth compared to the same period of previous fiscal year. This growth is predominantly fuelled by the software and business services sector. With a projected 8% increase in global IT spending for 2024, India's services exports outlook remains favourable. The narrowing merchandise trade deficit and the upward trajectory of net services receipts are anticipated to contribute to an enhancement in India's current account deficit.

As we move ahead in 2024, the global economic landscape is anticipated to introduce further complexities, necessitating sustained vigilance to uphold India's external resilience. It is important for India to address medium-term challenges, including securing technology and resources for energy transition and skill development for the 21st-century economy. Concurrently, maintaining fiscal consolidation at the general government level is crucial.

The Indian economy shows promising signs with the RBI forecasting a 7.2% real GDP growth for FY25, supported by the prospects of robust rabi harvesting, manufacturing profitability, and resilient services. While risks such as geopolitical tensions and supply chain disruptions persist, lower input prices and moderated food inflation are expected to positively impact output growth and export prospects. With efforts to enhance export competitiveness and stable inflation rates, the outlook for India's economic growth remains favourable.

The collective efforts invested over the past several years have laid a robust foundation, providing a sturdy platform upon which the framework of a middle-income economy can be built.