Real GDP growth projection of 6.5-7% seems appropriate: FinMin report
Tribune News Service
Chandigarh, August 22
Notwithstanding erratic monsoon, India’s economic momentum remains intact and the projection of real GDP growth of 6.5-7.0 per cent for FY25, made in the Economic Survey for 2023-24, seems appropriate, according to a Finance Ministry report.
The Monthly Economic Review report for July, released today, further stated that the steady progress in the southwest monsoon has supported kharif sowing.
Replenishing water levels in reservoirs bodes well for the current kharif and upcoming rabi crop production, will further aid in reducing food inflation in the coming months.
According to the report, the Indian economy has sustained its momentum in the first four months of FY25. Also, GST collections in the first four months of FY25 underwent a level shift pushed up by the widening of the tax base and heightened economic activity.
The resilience of domestic activity is also reflected in the strong performance of the manufacturing and services sector purchasing managers’ indices. The manufacturing growth has been driven by expansion in demand conditions, a rise in new export orders and growth in output prices, states the report.
Going forward, the measures announced in the Union Budget FY25 for the MSMEs, manufacturing and services sectors are expected to give a big boost to the sectors. As far as the external sector is concerned, there is evidence of trend reversal in FY25, with merchandise exports and imports surpassing their previous year’s level.
According to the report, the recovery in global demand across India’s major exporting partners has given a boost to exports, while a strong domestic demand has encouraged imports. A greater increase in imports compared to exports has resulted in a widening of the merchandise trade deficit.
Also supported by robust capital flows, foreign exchange reserves reached a historical high of USD 675 billion as of August 2, 2024, sufficient to cover 11.6 months of imports.
