In line with Nirmala Sitharaman, the Finance Minister, India’s gross domestic product (GDP) would reach the $3.75 trillion mark in 2023, up significantly from the $2 trillion mark in 2014. She highlighted India’s status as the fifth-biggest economy in the world and referred to it as a “shining star” in the global economy. India’s GDP currently exceeds that of the United Kingdom (USD 3,159 billion), Canada (USD 2,089 billion), Russia (USD 1,840 billion), France (USD 2,924 billion), and Australia (USD 1,550 billion).
According to recent government data, India’s GDP increased by 6.1% in the fourth quarter of the fiscal year 2022–2023, which was higher than market projections. 7.2% was the overall growth rate for the whole fiscal year 2022–2023, demonstrating the nation’s economic pliability in the face of regional tensions and global concerns.
“In 2023, India’s GDP increased to $3.75 trillion from almost $2 trillion in 2014, moving it up from tenth to fifth place in the world’s economy.” The office of Nirmala Sitharaman stated that “India is now widely recognised as a Bright Spot in the worldwide economic landscape.”
The 7.2% growth reported in the most recent fiscal year was also praised by Dr. V Anantha Nageswaran, (CEA) Chief Economic Advisor, who noted that it is the first accurate estimate of GDP growth and has the potential for additional higher revision as more data become available.
“Despite the negative effects of the global pandemic on household expenditure, private consumption has recovered and is almost back to the pre-pandemic trend. Urban consumption has been the main driver of the quick rebound, according to CEA Nageswaran.
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According to a recent prediction by the ratings firm Moody’s, the Indian economy will expand by between 6% and 6.3% in the April–June quarter. It did, however, also draw attention to the dangers of fiscal slippage brought on by lower-than-anticipated revenue from the government in the present fiscal year. Gene Fang, Associate Managing Director at Moody’s Investors Service, brought up India’s comparatively large general government debt, projected to be around 81.8% of GDP in 2022–23, and its low debt affordability.
Fang emphasised India’s high development potential and credit qualities, including a solid external position and a secure domestic financing base for government debt. In the first quarter of the current fiscal year, he said, “We anticipate India’s growth to be around 6–6.3%, which remains relatively stable compared to the 6.1% recorded in the final quarter of fiscal year 2022–23.”
The general elections are scheduled for May 2024, and Fang continued, “While the government strives to maintain long-term fiscal sustainability while supporting the economy in the face of high inflation and weak global demand, and with those elections approaching, we expect some risks of fiscal slippage arising from potentially weaker-than-expected government revenues.”
The Reserve Bank of India (RBI) forecast of 8% for the first quarter, released in the second monetary policy assessment for the fiscal year 2023–2024, is lower than Moody’s growth projection.
