Ahead of the Interim Union Budget, the Finance Ministry released a report on January 29 projecting India's real GDP growth to approach 7% in 2024-25, with potential to surpass 7% by 2030. The report also anticipates India's economy reaching $5 trillion within the next three years, positioning it as the world's third-largest economy.
Chief Economic Advisor V Anantha Nageswaran prefaced the report with insights on the quality of growth, emphasizing the significance of achieving 7% growth in a global economy struggling at 2%. He highlighted the qualitative superiority of growth achieved amid challenging global conditions.
The forecasted growth trajectory, if realized, would mark four consecutive years of 7% or higher growth, signaling resilience and potential for India's economy. Nageswaran clarified that the report serves as a review rather than the official Economic Survey, which will precede the full Budget after the general elections.
The report delineates India's growth narrative into two phases: pre-2014 and '2014-2024: Decade of transformative growth.' Despite initial challenges, structural reforms implemented since 2014 have bolstered macroeconomic fundamentals, positioning India as the fastest-growing economy among G20 nations.
Key reforms such as the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code have contributed to India's economic resurgence. However, the report acknowledges lingering challenges, including constraints on global trade, supply chain vulnerabilities, and the legacy of twin-global shocks.
While emphasizing the resilience of domestic consumption, the Finance Ministry underscores the government's welfare-oriented policies aimed at expanding the middle class and enhancing overall consumption. The report reflects a journey "from fragility to stability and strength," showcasing India's economic evolution.
Despite cautious optimism, the Finance Ministry recognizes the evolving dynamics of global trade and emphasizes the need for continued structural reforms to sustain growth momentum and navigate emerging challenges effectively.