Sustaining the Economic Ascent

India is at an inflexion point. The current momentum of economic growth, along with structural changes, will steer the vision of Viksit Bharat

- RAJIV MEMANI

THE INDIAN ECONOMY grew by 7% in financial year 2022-23 (FY23) and 8.2% in FY24, making it the fastest-growing large economy in a challenging global economic environment. Besides the current strengths, there are clear signs of important structural changes underway, all pointing to the likelihood of India becoming a developed nation by 2047.

Macroeconomic parameters are stable. There is clarity, consistency, and focus on long-term economic growth in the government’s policymaking. The government has also been fiscally prudent. Even when the economic impact of Covid-19 was felt acutely, the government stayed away from the temptation of a large-scale fiscal stimulus. Instead, it focussed on directing credit to boost capital spending. The fiscal deficit has declined to 5.6% in FY24, with the possibility of reaching 3% by FY28. Foreign exchange reserves of nearly $700 billion provide a cushion against external shocks.