The Ministry of Finance recently released a report titled “Indian Economy – A Review,” prepared by the office of Chief Economic Advisor (CEA) V Anantha Nageswaran. The Indian economy is likely to achieve a growth rate of 7% in fiscal year 2025 with a GDP of $5 trillion after growing at or 7 percent in 2023-24, driven by resilient domestic demand despite risks and uncertainties in the global economic landscape.
Although it doesn't replace the official Economic Survey, this study offers insightful information about the past ten years' trajectory, prospects, and forecast for the Indian economy. It is noteworthy that the official Economic Survey is anticipated to be released following the general elections and the formation of the new government. The Review, which is divided into two chapters, assesses the current status of the Indian economy, its trajectory over the past ten years, and provides a concise forecast for the years to come.
In the upcoming years, Nageswaran predicts three themes that India will face. The period of extreme globalization in the manufacturing sector has ended. Given that nations are only now realizing the extent of global supply chain integration, de-globalization is not something that will happen very soon. If and when an alternative to the globalization of supply chains arises, it will take a lot longer. Nageswaran outlined two important suggested measures: reducing logistics costs and investing in product quality to maintain and grow market share in areas where India has an edge.
He has also praised the government's achievements in constructing infrastructure at a pace never seen before in history. According to budget projections, Nageswaran stated that the government increased capital investment in the public sector from ₹5.6 lakh crore in FY15 to ₹18.6 lakh crore in FY24. The expansion of physical and digital infrastructure during the past 10 years is real, palpable, and revolutionary, regardless of the length of highways, freight corridors, airports, metro rail networks, or trans-sea link.
Commenting on the Indian households and their financial health, Nageswaran said, “Fifty-one crore bank accounts under Jan Dhan Yojana now have total deposits of over ₹2.1 lakh crore. Over 55 per cent of them are women. In Dec 2019, household financial assets were 86.2 percent of GDP; liabilities were 33.4 percent of GDP. In March 2023, these numbers were 103.1 percent and 37.6 percent, respectively. So, Net Financial Assets of households were 52.8 percent of GDP in Dec 2019, and by March 2023, it had improved to 65.5 percent of GDP.”