The Indian economy is poised for robust growth, with a projected gross domestic product (GDP) growth of over 7% in the coming year, a report published by the finance ministry said.
Titled ‘The Indian Economy-A Review,’ the report anticipates India becoming the third-largest global economy within three years, boasting a $5 trillion GDP.
This optimistic outlook is attributed to a combination of factors, including burgeoning domestic demand and strategic supply-side initiatives such as investments in infrastructure and measures to bolster manufacturing.
“It now appears very likely that the Indian economy will achieve a growth rate at or above 7% for FY24, and some predict it will achieve another year of 7% real growth in FY25 as well. If the prognosis for FY25 turns out to be right, that will mark the fourth year post-pandemic that the Indian economy will have grown at or over 7%. That would be an impressive achievement, testifying to the resilience and potential of the Indian economy,” chief economic advisor V. Anantha Nageswaran said in the report.
The report is distinct from the official Economic Survey of India, which is typically tabled in Parliament before the Union Budget presentation.
“This is not the Economic Survey of India prepared by the Department of Economic Affairs. That will come before the full budget after the general elections. This review takes stock of the state of the Indian economy and its journey in the last ten years and offers a brief sketch of the outlook for the economy in the coming years,” the preface to the report said.
Praising the government for its skill development initiatives, the report said the Center recognized the importance of a skilled workforce in a rapidly changing global economy and took proactive measures to enhance the employability of its citizens.
“According to India Skills Report 2023, the employable percentage of final-year and pre-final-year students has increased from 33.9% in 2014 to 51.3% in 2024,” it pointed out.
The measure of employability is based on the results of the Wheebox National Employability Test, an online assessment that measures skills and competencies that are relevant to the job market.
Combined with rising enrolment in higher education (from 32 million in 2013-14 to 41 million in 2020-21), rising employability implies that India’s young workforce is both expanding and becoming increasingly employable, the report said.
While the report underscores an optimistic economic scenario, it also acknowledges a potential area of concern: in an increasingly interconnected global economy, India’s growth prospects are not solely contingent on domestic performance but also mirror reverberations of global developments.
“Increased geo-economic fragmentation and the slowdown of hyper-globalization are likely to result in further friend-shoring and on-shoring, which are already having repercussions on global trade and, subsequently, on global growth,” the report said.
The intricate balance between energy security, economic growth, and the transition to renewable energy sources encompasses various dimensions—geopolitical, technological, fiscal, economic, and social.
The policy measures undertaken by individual countries further compound the complexity, impacting economies beyond their borders, the report notes.
It warns that the advent of artificial intelligence (AI) poses a significant challenge for governments worldwide, particularly in the services sectors, raising concerns about employment.
It also sees the availability of a skilled workforce as a challenge to economic growth.
“Domestically, ensuring the availability of a talented and appropriately skilled workforce to the industry, age-appropriate learning outcomes in schools at all levels and a healthy and fit population are important policy priorities in the coming years. A healthy, educated and skilled population augments the economically productive workforce,” the report added.
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