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Current Positive Economic Indicators for FY 24-25 and beyond ,for Indian Economy

 


GST collections and core sector growth in FY24 paint a positive picture of the Indian economy at the end of the fiscal year. Here's a breakdown of what we know:

  • GST Collections: Reports indicate that GST collections remained buoyant throughout FY24. In February 2024, collections reached Rs 1.7 lakh crore, reflecting a year-on-year growth of 12.5% [1]. This trend is consistent with the entire fiscal year, suggesting increased economic activity.

  • Robust Core Sector Growth: The core sector, which comprises eight key infrastructure industries in India, witnessed strong growth in February 2024. The Purchasing Managers' Index (PMI) for manufacturing activity rose to 56.9, indicating a significant expansion. Additionally, the output of these core sectors reached a three-month high of 6.7% in February, compared to 4.1% in January [2].

Connection Between the Two: A rise in GST collections often reflects a growth in economic activity. Businesses tend to collect and pay more GST as they sell more goods and services. So, buoyant GST collections can be seen as a positive indicator alongside robust core sector growth. This suggests that FY24 might have been a period of economic expansion in India.

It's important to note that these are glimpses from reports and might not represent the final figures for FY24. However, they do provide encouraging signs about the Indian economy.

Here are some other positive economic indicators for India, besides the ones you mentioned:

  • Rising Foreign Exchange Reserves: High forex reserves provide a buffer against external shocks and can be used to stabilize the rupee.
  • Fiscal Deficit contained at 5.8% fo GDP and budgeted lower at 5.1%: This means the Govt is fully committed to fiscal consolidation glide path to bring down the Fiscal deficit to 4.5% or lower by FY26.
  • Increasing Foreign Direct Investment (FDI): FDI inflows indicate that foreign investors are confident in the Indian economy and see it as a good place to invest.
  • Indian Govt Bond inclusion in JP Morgan and Bloomberg Indices in FY 24-25: This is expected to bring an inflow of US25 billion in the Financial year ending 2025.
  • Likely Improvement of Credit Rating: Due to the above positive economic indicators, the new Indian Govt after elections can rightfully expect a good credit rating upgrade from international agencies which will allow India to borrow money at lower interest rates and with all the positive news can attract capital at cheaper costs.
  • Growing Startup Ecosystem: A thriving startup ecosystem signifies innovation and entrepreneurship, which can drive future economic growth.
  • Government Reforms: Recent government reforms aimed at improving ease of doing business and attracting investments through schemes like PLI can boost economic activity, employment and a growing manufacturing pie.This can have Multiplier effect across the economy on income and employment opportunities.
  • Growing Services sector and Services Exports:According to the commerce ministry, India's services exports in April 2023–February 2024 were $314.82 billion, which was a 7% increase from the same period in 2022–2023

It's important to remember that a healthy economy relies on a balance of various factors. While these indicators are positive, we should also monitor potential challenges like inflation, unemployment rates, and global economic conditions.

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