The State Bank of India’s Economic Research Department has released a comprehensive research report titled “When 8 per cent becomes the new normal: Decoding the new normals of a GDP on swing,” shedding light on India’s economic trajectory, particularly focusing on the recent GDP surge and offering projections for the future.
Remarkable Growth in GDP
The report underscores the unprecedented growth observed in India’s economy during the third quarter of FY24, surpassing all prior estimates and expectations. India’s GDP expanded by an impressive 8.4 per cent during this period, following consecutive quarters of over 8 per cent growth. This surge has been attributed to effective policy frameworks and perspectives, exceeding market expectations.
Indicators of Economic Robustness
Buoyancy in indirect tax collection, with a notable 32 per cent year-on-year growth amounting to Rs 3.9 lakh crore, further validates the robustness of the economy. Projections for FY24 suggest a GDP growth of 7.6 per cent and Gross Value Added (GVA) growth of 6.9 per cent. The report indicates a potential attainment of 8 per cent growth for the fiscal year, with the fourth quarter GDP growth estimated around 5.9 per cent.
Sectoral Performances and Milestones
The report delves into sectoral performances, highlighting stellar growth in Manufacturing and Services, driven by significant expansions in industry, manufacturing, and construction sectors. However, the agriculture sector witnessed a decline of -0.8 per cent in Q3, attributed to various uncontrollable factors. Noteworthy milestones include per capita GDP crossing the Rs 2 lakh mark in FY24, with a Decadal Compound Annual Growth Rate (CAGR) standing at 8.9 per cent.
Investment and Savings Trends
Analysis of investment and savings trends over the past decade reveals an increase in Gross Capital Formation (GCF) and gross savings. Notably, there’s an improvement in the Incremental Capital Output ratio (ICOR), signifying enhanced efficiency in capital utilization and laying the groundwork for sustained economic growth.
Promising Outlook
In conclusion, the findings of the SBI report paint a promising outlook for India’s economy, with the potential for sustained growth at 8 per cent in FY25. The report’s insights provide valuable guidance for policymakers and stakeholders, indicating the resilience and potential of India’s economic landscape.
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