FDI INFLOW TO BOOST DOMESTIC MFG SECTOR

The Finance Ministry is banking on stronger external support for domestic manufacturing in the upcoming months and greater focus by an increasing number of organisations in the US and Europe on enhancing supply chain resilience to benefit India’s manufacturing firms as part of the China Plus One strategy.

- NIVEDITA MUKHERJEE

At the same time, prediction of a normal southwest monsoon auguring well for food production and easing of price pressures, positive show by industrial and service sectors backed by brisk domestic demand, increased credit flow to transport and real estate segments and policy support and robust investments in physical, digital infrastructure and logistics create strong macro-economic buffers that are expected to help the real sectors of the economy navigate the external headwinds smoothly and continue the growth momentum of the previous year, the Finance Ministry says in its monthly economic review for April.

Expressing optimism over the Indian economy closing FY24 strongly with its growth surpassing market expectations, despite strong external headwinds, the MER takes stock of early indications and emerging robust trends in important high-frequency indicators of growth like the GST collections, e-way bills, electronic toll collections, sale of vehicles, purchasing managers’ indices and the value and number of digital transactions that suggest a continuation of the economic momentum during the first quarter of FY25. The GST collection recorded a 12.4 per cent year-on-year (yoy) growth driven by strong increase in domestic transactions of 13.4 per cent and imports of 8.3 per cent, jumping to a high of Rs 2.1 lakh crore in April 2024.