India’s economic landscape remains robust, with the Finance Ministry announcing steady revenue growth in September and assuring that the country’s fiscal position is solid.
According to the ministry’s monthly economic review, released on Monday, India’s headline inflation is expected to stay within the target band for the remainder of the year, reflecting a stable economic environment.
One of the key drivers of this positive trend is the strong private consumption demand, which continues to fuel economic growth.
Additionally, India has experienced a rise in investment demand and industrial activity in September. The report highlighted the steady growth in revenues generated from both direct and indirect taxes, indicating the underlying strength of economic activity and an expanding tax base.
Furthermore, the rationalization of revenue expenditure has allowed for increased capital expenditure, while adhering to the budgeted borrowing targets. The government’s capital spending and initiatives have facilitated a boost in private corporate investments, leading to a gradual increment in investment demand. Construction activity received a significant boost, supported by housing loan financing and positive trends in property markets.
The report also highlighted encouraging employment trends, including an improving labor force participation rate and increased female participation in the workforce. Despite the positive domestic macro fundamentals, the report acknowledged the potential risks posed by global headwinds and uncertainties related to weather conditions.
Looking ahead to the second half of FY24, the Finance Ministry expressed confidence in India’s macroeconomic outlook. The country’s economic trajectory is expected to be driven by strong domestic fundamentals, robust private consumption, and sustained investment demand.
Additionally, broad-based industrial growth and a buoyant residential property market are poised to further bolster India’s economic prospects. Although global demand has been sluggish, it is anticipated to recover in the latter half of FY24, contributing to India’s economic resilience.