India's Economy To Grow At _____ In FY24 As Per FICCI Survey.

Indian Economy - General Knowledge Questions

7.4%

7.1%

6.7%

6.3%

Correct Answer : 6.3%

The recent Economic Outlook Survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) predicts a 6.3% expansion in India's economy for the fiscal year FY24.

The Federation of Indian Chambers of Commerce and Industry (FICCI) recently unveiled its latest Economic Outlook Survey, providing insights into the anticipated growth of India’s economy in the upcoming fiscal year, FY24. The survey, conducted in September 2023, brings together eminent economists from the banking, financial services, and industry sectors to provide a comprehensive analysis of the economic landscape.

Positive Contributors to Growth : The survey’s central projection foresees a 6.3% growth in the Indian economy for FY24. This projection hinges on several key factors:

1. Strong Financial Sector : India’s robust financial sector is expected to be a key driver of economic growth. As the sector continues to evolve and adapt to changing global dynamics, it is poised to provide critical support for the country’s economic expansion.

2. Urban Demand : Strong urban demand is another driving force behind the anticipated growth. As cities continue to develop and urbanization increases, consumer spending is expected to rise, further stimulating economic activity.

3. Private Investment : The survey underlines the importance of private investment, which is expected to surge due to the government’s front-loading of capital expenditures. This government strategy has incentivized private enterprises to invest in various sectors, contributing significantly to economic growth.

4. Real Estate Recovery : The real estate market is projected to pick up, indicating positive signs of recovery. This sector, which has faced challenges in recent years, is expected to play a pivotal role in boosting the economy.

5. Festival Season : The festival season is also anticipated to stimulate economic growth. Festive occasions often lead to increased consumer spending, which, in turn, fuels economic expansion.

Moderation in GDP Growth : While the survey’s central forecast is promising, it also predicts a moderation in GDP growth. After recording a growth rate of 7.2% in 2022-23, the expected 6.3% growth for 2023-24 signifies a slight deceleration in the pace of economic expansion.
Potential Challenges

The survey highlights several external factors that could pose challenges to India’s economic growth in the coming year:

1. Geopolitical Tensions : Ongoing geopolitical tensions in various regions can have far-reaching impacts on India’s economic stability and growth prospects. FICCI’s survey acknowledges the need to navigate these complex international relations carefully.

2. China’s Economic Slowdown : The slowing economic development in China, a significant trading partner for India, is another factor that requires close monitoring. Economic developments in China can influence India’s economic fortunes.

3. Monetary Tightening : The delayed effects of monetary tightening, implemented to control inflation and stabilize the financial system, might affect India’s economic trajectory in FY24.

4. Monsoon Variability : India’s agricultural sector is particularly vulnerable to variations in the monsoon season. The survey warns that a below-average monsoon could have adverse effects on the growth of agricultural and related industries.
Sectoral Insights

The survey provides sector-specific growth forecasts :

Agriculture : Growth in the agricultural sector is predicted to decrease from 4% in FY23 to 2.7% in the current fiscal year due to the influence of El Niño on monsoon rainfall.

Industry : The industry sector is expected to grow at a rate of 5.6%, reflecting its importance in India’s economic landscape.

Services : The services sector is anticipated to exhibit robust growth at 7.3%, underlining its role as a key contributor to India’s economic expansion.
Inflation Outlook

The direction of inflation remains uncertain. The survey suggests that Consumer Price Index (CPI)-based inflation is expected to hover around 5.5% in FY24, with a range of 5.3% to 5.7%. Factors contributing to inflationary pressures include the stickiness of cereal prices, fluctuations in agricultural commodities, and disruptions in global supply chains.

Inflation Risks and Volatility in Prices : The survey emphasizes that while the CPI inflation rate may have peaked, upside risks to prices persist. Volatility in food prices due to weather-related uncertainties, international events like the cancellation of the Black Sea grain deal, and spikes in crude oil prices all have the potential to contribute to inflationary pressures.

Investment Momentum : One of the survey’s key findings is the positive impact of the government’s emphasis on capital spending. This strategy has triggered a surge in private investments and has supported the momentum of expansion in the economy. However, the survey cautions that it may take some time for investments to gain full momentum, and further rebounds in private investments will be influenced by both domestic and international consumption activities.

Published On : October 17, 2023

Recent Updates in Indian Economy - General Knowledge Questions

Q .

NIPFP Forecasts India’s FY25 GDP Growth at____.

5.8%

6.3%

6.7%

7.1%

Correct Answer : 7.1%

The National Institute of Public Finance and Policy (NIPFP) predicts India’s GDP growth for the fiscal year 2024-25 to be 7.1%. Utilizing high-frequency models, NIPFP underscores the government’s fiscal consolidation efforts, emphasizing tax buoyancy and compression of revenue expenditure.

States’ Capex Growth :

In the fiscal year 2023-24, states witness robust capital expenditure (capex) growth, attributed to substantial transfers from the central government. This highlights the effective utilization of resources at the state level, contributing to economic expansion.

Divergent Projections :

While NIPFP’s forecast stands at 7.1%, other entities such as the Asian Development Bank (ADB) and Fitch Ratings estimate a growth rate of 7%. In contrast, the International Monetary Fund (IMF), S&P Global Ratings, and Morgan Stanley project a slightly lower growth rate of 6.8% for FY25, indicating varying perspectives on India’s economic trajectory.

IMF’s Appreciation of India’s Fiscal Discipline :

The International Monetary Fund (IMF) commends India for maintaining fiscal discipline, particularly noteworthy in an election year. Emphasizing the significance of sound macro fundamentals, IMF’s Director for Asia and Pacific Department, Krishna Srinivasan, lauds India’s steady economic performance, projecting growth at 6.8% for 2024-25, driven by private consumption and public investment.

Published On : April 27, 2024

Category : Indian Economy

Q .

What is the revised GDP growth forecast for India for 2024-25 according to the IMF?

6.8%

7.1%

7.8%

8.2%

Correct Answer : 6.8%

The International Monetary Fund (IMF) on Tuesday (16th April 2024) raised India’s GDP growth projection for 2024-25 by 30 basis points to 6.8 per cent in its update to the World Economic Outlook (WEO), citing buoyant domestic demand. However, the fund’s estimate is below the 7 per cent growth projection by the government.

“Growth in India is projected to remain strong at 6.8 per cent in 2024 (FY25) and 6.5 per cent in 2025 (FY26), with the robustness reflecting continuing strength in domestic demand and a rising working-age population,” the IMF said in its report. For India, according to the report, data and forecasts are presented on a financial year basis.

For FY24, the IMF raised India’s GDP growth projection to 7.8 per cent, compared to 6.7 per cent in its January report. For FY26, the IMF expects the country’s economic growth to slow down slightly to 6.5 per cent -- the same as projected in its January update.

According to the second advance estimates by the National Statistical Office, the growth rate of GDP during 2023-24 was estimated at 7.6 per cent, compared to a growth rate of 7 per cent in 2022-23.

Rating agencies, including Fitch and Barclays, recently revised India’s GDP growth projection for FY24 to 7.8 per cent due to strong domestic demand and persistent growth in business and consumer confidence levels.

The finance ministry in its last monthly economic report (for February) said that strong growth accompanied by stable inflation and external account, and progressive employment outlook would help the Indian economy close FY24 on a positive note. “There are headwinds like indications of hardening crude oil prices and global supply chain bottlenecks to trade. Nonetheless, India, on the whole, looks forward to a bright outlook for FY25,” it said.

On inflation, the fund projected India’s consumer price inflation declining from an average of 5.4 per cent in FY24 to 4.6 per cent in FY25, and further to 4.2 per cent in FY26..

Source : Business Standard

Published On : April 18, 2024

Category : Indian Economy

Q .

What was the inflation rate in India's Wholesale Price Index (WPI) for March 2024?

0.92%

0.78%

0.53%

0.41%

Correct Answer : 0.53%

March 2024 witnessed a positive inflation rate of 0.53% in India’s Wholesale Price Index (WPI) compared to March 2023. This inflation was primarily attributed to increased prices in food articles, electricity, crude petroleum & natural gas, machinery & equipment, and other manufacturing sectors.

Month-over-Month Change in Major Groups of WPI :

1. Primary Articles (Weight 22.62%) :

* The Primary Articles group’s index surged by 0.94% to 183.1 in March 2024. Significant price increases were seen in crude petroleum & natural gas, food articles, minerals, and non-food articles.

2. Fuel & Power (Weight 13.15%) :

* The Fuel & Power group’s index rose marginally by 0.06% to 155.2 in March 2024. While electricity and mineral oils saw price increases, coal prices declined.

3. Manufactured Products (Weight 64.23%) :

* The Manufactured Products group index increased by 0.21% to 140.1 in March 2024. Notable price increases were observed in food products, motor vehicles, trailers and semi-trailers, rubber and plastics products, and other manufacturing sectors.

4. WPI Food Index (Weight 24.38%) :

* The WPI Food Index, comprising food articles from Primary Articles and food products from Manufactured Products, rose from 178.3 in February 2024 to 180.1 in March 2024. This led to an increase in the inflation rate from 4.09% to 4.65%.

Published On : April 16, 2024

Category : Indian Economy