External sector, uncertain weather pose risk to growth: Finance Ministry report

New Delhi, May 22

There are downside risks to growth and upside risks to inflation, partly channelled through the external sector and partially originating from weather uncertainties, the Finance Ministry said in a report on Monday.

Agriculture sector prospects bright

• Prospects in agri, manufacturing, services sector bright
• Normal monsoon forecast augurs well for healthy kharif sowing season
• Textile, readymade garment shipments from India shaping up

Consumption has shown steady and broad-based growth while investment in capacity creation and real estate is finding traction, said the April edition of the Finance Ministry’s ‘Monthly Economic Review’.

“April is too early to forecast the economic outcomes for the entire year. A good beginning, though, is a harbinger of positive outcomes,” it said. Observing that FY24 for the Indian economy opened on the back of strong activity witnessed in the last quarter of the previous fiscal, the report said GST collections in April, which marked the commercial activity of the last month, underwent a level shift pushed up by the widening of the tax base and heightened economic activity.

Index of Industrial Production (IIP) and Eight Core Industries Index (ECI) averaged steady growth in Q4 of FY23, adding to the capacity utilisation hovering close to 75 per cent two quarters earlier, the report said. Like the manufacturing and services sector, it said, the prospects for the agriculture sector also appear to be bright.