Government assures easy growth of GDP at 6.5% in FY24

The recent economic reviews on GDP, suggested by finance ministry claims a positive growth of 6.5 percent in upcoming fiscal year. Meanwhile, the Reserve Bank of India has recently projected India's economic growth at 7% in the current fiscal year as compared to 6.5% , previously.

Government assures easy growth of GDP at 6.5% in FY24

Seeking quarter-wise growth, the second half of Q2 of FY24 is expected to inflow more investments and export opportunities, as per the recent trending session of market stance. The major factors like the US Federal Reserve maintaining status-quo on interest rates cut, huge inflow of foreign investments and decreasing volatility in domestic currency has led to intensify more high growth projections. Therefore it is expected that growth momentum will be maintained for long lasting period. In second quarter of ongoing fiscal year, the growth has been emancipated about 7.6%, which is about 60 bps points higher than the market expectation.

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On analysing the capex growth and expenditures of the Indian government, it is profounded that core index growth for wholesale inflation and retail inflation has been subsidised by many other influencing factors and the last months of the year [October to December] has averaged the losing momentum with around 4 to 5% ratio growth. The capital expenditure as per data of CGA, currently stood at Rs5.86 trillion in April-November. In October- November, the capex growth averaged -6.6% as against 58.9% growth recorded in H1.

The major factors influencing GDP growth are the production of goods, consumption and its sale in the international market, the maximum rates are gauged by economic indices parameters like PMI[ Purchasing Manager's Index].

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The S&P Global India Manufacturing PMI rose to 56 in November 2023 from October's 8- month low of 55.5. While the IIP data shows 16-month high of 11.7 percent in October 2023. The previous high of IIP growth was recorded at 12.6 percent in June 2022, as per the data.

The four main components factors that decide GDP growth are consumption, investment, government spending, and exports. Consumption is the largest component of GDP and is measure of all spending by households on goods and services. Nearly 70% of India's GDP is driven by domestic consumption.

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