India’s Economic Strength Shines Amidst Global Challenges | Economic Affairs Secretary Highlights Resilient Growth

The Economic Affairs Secretary of India, Ajay Seth, emphasized the resilience of the Indian economy, noting that despite global challenges, India’s GDP growth estimate for the fiscal year has been revised upwards from 7.3% to 7.6% in the second advance estimates. Speaking at the Development Committee meeting, Seth highlighted India’s exceptional performance amidst sluggish global growth trends.

He mentioned that India achieved growth above 8% for three consecutive quarters of FY24, reaffirming its position as a standout performer. Various agencies have also revised India’s fiscal 24 growth estimate closer to 8%, praising India’s proactive approach to reform and investment in sustainable growth avenues, which sets a benchmark for emerging economies.

Seth highlighted India’s continued focus on capital expenditure, which has helped to attract private investment and enhance Gross Fixed Capital Formation (GFCF) by over 10% in FY24. He also mentioned positive trends in inflation, with both headline and core inflation trending downwards, indicating a moderation in price pressures.

On the external front, Seth noted improvements in the current account balance, driven by a narrowing merchandise trade deficit and rising net services receipts, expected in fiscal 2024.

To foster the AI innovation ecosystem, India has approved the “India AI Mission” with a budget of INR 103 billion. This initiative aims to build computing infrastructure, develop indigenous AI capabilities, streamline access to datasets, attract AI talent, and support AI start-ups. Seth emphasized that this mission will propel India’s technological innovation and strengthen its position in the global supply chain.

In the manufacturing sector, India saw double-digit growth in Q3 of fiscal year 24, driven by increased investment, improved investor confidence, and strong domestic demand. The services sector also experienced strong growth, led by non-contact-intensive services.

India’s digital transactions have seen significant growth, with the country accounting for 46% of global real-time transactions in 2022. The volume of UPI online transactions witnessed a 54% YoY growth in Q3 FY24, driven by convenience, security, and increased financial flexibility for consumers.

Seth highlighted the impact of increased mobile connectivity and its linkage with bank accounts on India’s inclusive economic growth. He noted that the Indian capital market has remained one of the best performing among emerging markets, thanks to a robust investment climate and a technology-anchored transparent trading system.

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