Momentum in Indian economy continues, households not in distress: CEA

Chief Economic Advisor V. Anantha Nageswaran today said the momentum in the Indian economy continues on the back of private consumption, capital formation and exports doing well. Nageswaran says the households are doing well and are investing in the financial assets. “There is momentum in the economy. In fact, now we are one quarter into the new financial year. Even the high frequency indicators are telling us that the economy is carrying that momentum we have seen till march 2024, when we grew at 8.2%,” Nageswaran says, while addressing a press conference on the Economic Survey 2023-24.

“The average growth rate in the last three years up to March 2024 has been around 8% and we write in the Survey, the real GDP is 20% above the pre-pandemic levels. Growth is maintained by a steady share of private consumption, capital formation and exports, which are doing well,” Nageswaran adds.

Nageswaran says private investment is also picking up in the economy. “Investment is being driven not only by public sector capital formation. Private capex has been growing. It has recovered after the stagnation seen in 2020 and 2021. And they did pick up in 2022 and 2023. Nageswaran also made a strong observation that the households are not under any distress and are rather investing in the financial assets that have done very well."

Earlier in the day, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament. The Survey pegged the country’s FY25 GDP growth in the range of 6.5%-7%. “Domestic growth drivers have supported economic growth in FY24 despite uncertain global economic performance. Improved balance sheets will help the private sector cater to strong investment demand. While merchandise exports are likely to increase with improving growth prospects in advanced economies, services exports are also likely to witness a further uptick,” says the Survey.