In a comprehensive report titled “The Indian Economy: A Review,” prepared by V Anantha Nageswaran, Chief Economic Advisor to the government, and his team of economists, India takes stock of its economic journey over the past decade.
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According to Nageswaran, India is confident in weathering emerging disturbances, transitioning from fragility to stability and strength.
The report emphasises India’s deft management of crude oil supply and predicts a growth rate pegged at or above 7 per cent for FY24 and FY25, marking a resilient economic recovery after the Covid-era disruptions.
Moreover, it projects India’s economy could potentially reach $7 trillion by 2030.
Trends and challenges in the coming years
The report highlights three key trends India will face in the years ahead.
Firstly, the era of hyper-globalisation in global manufacturing has ended.
Secondly, India is not expected to witness de-globalisation soon, but the government plans to focus on onshoring and friend-shoring of production.
Thirdly, India will have to address challenges such as supply chain disruptions, the impact of Artificial Intelligence on services trade and employment, and the energy transition.
Government’s green initiatives and infrastructure development
The report also covers rising concerns over climate change and the increasing focus on reducing carbon emissions.
In the report, Nageswaran commends India’s skilful navigation of the trade-off between economic growth and energy transition.
He applauds the government’s progress in building infrastructure at an unprecedented rate, noting a significant increase in public sector capital investment from 5.6 lakh crore rupees in FY15 to 18.6 lakh crore rupees in FY24.
The report details advancements in highways, freight corridors, airports, metro rail networks, and trans-sea links, showcasing tangible and transformative growth in physical and digital infrastructure.
Financial sector’s strength and key reforms post 2014
India’s financial sector, with a stronger balance sheet, active lending, and robust non-food credit growth is also in a healthy position.
The report points out that 51 crore Jan Dhan Yojana bank accounts, holding over 2.1 lakh crore rupees in deposits, indicate good financial health among Indian households.
It calls India’s journey in the last 10 years as the ‘decade of transformative growth’ in the last decade, with key reforms such as the Goods and Services Tax and the Insolvency and Bankruptcy Code, and the government’s all-inclusive welfare approach boosting India’s economic profile.
The Finance Ministry document also notes the transformative impact of India’s Digital Public Infrastructure on e-commerce and middle-class consumption.
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The report, in short, argues that India’s ‘transformative growth’ has helped its economy remain a bright spot in an otherwise gloomy global economy.
