India’s Economy Soars: Growth Surpasses Estimates, Consumption Booms


New Delhi, December 29, 2023: India’s economic engine is roaring! The Finance Ministry’s half-yearly review revealed robust performance, surpassing growth projections and painting a bright picture for the future. Here are the key highlights:

Growth Beyond Expectations:

  • Real GDP surged 7.7% in the first half of FY24, exceeding the government’s estimate of 6.5%.
  • Strong domestic demand, fueled by a 4.5% rise in private consumption expenditure, propelled this impressive growth.
  • India emerged as the fastest-growing major economy in H1, attracting positive attention from both domestic and international agencies.

Inflation on the Decline:

  • Core inflation is steadily decreasing, while fuel inflation remains negative, leading to an overall downward trend in headline inflation.
  • RBI projects inflation to average 5.4% in FY24, offering stability and investor confidence.
  • Food inflation remains elevated, particularly in some vegetables, pulses, spices, and fruits, requiring focused attention.

Job Market Flourishes:

  • Urban unemployment rate dropped from 7.2% to 6.6% in Q2, reflecting improving employment opportunities.
  • Net payroll additions under EPFO saw a significant 18.9% year-on-year increase in H1, indicating widespread job creation.
  • Lower exit rate from EPFO further underscores increased job security and employee satisfaction.

Revenue Collection Strong:

  • Net tax revenue jumped 11.2% to ₹13 lakh crore between April and October 2023.
  • Robust growth in corporate (17.4%) and personal income taxes (over 30%) reveals strong economic activity.
  • Consistent high GST collections throughout FY24 reflect the bustling economic atmosphere.

Trade Deficit Reduced:

  • Despite an 8.8% contraction in merchandise exports, the net service trade increased by 15.5%.
  • Overall trade deficit nearly halved to $39.9 billion in H1 compared to the previous year’s $75.3 billion.

Looking Ahead:

India’s economic prospects remain optimistic, with strong domestic demand, declining inflation, and a thriving job market fueling growth. With the government addressing issues like food inflation and trade balance, the future appears bright for the Indian economy.