Mumbai: The RBI's June bulletin indicates a shift in India's growth trajectory from an average of 7 percent between 2003-19 to an expected average of 8 percent or higher from 2021-24, driven by domestic factors. Recent data shows a resurgence in private consumption driving demand, particularly among rural consumers. The fast-moving consumer goods sector anticipates a boost from increased public welfare spending.
While walk-in customers have decreased, e-commerce platforms are filling the gap, especially during heatwaves. Investments have been steadily growing, with some recent moderation possibly due to temporary uncertainties affecting investment decisions. The bulletin emphasizes the need for a strong revival in private investment to propel future growth, especially as public finances stabilize.
Government spending saw a modest uptick towards the end of 2023-24, reflecting a sustained emphasis on capital expenditure, which bodes well for the economy's medium-term outlook and investor confidence. Net exports, particularly in high-end manufacturing, have made a positive contribution to GDP.
The services sector is evolving, with a shift towards higher value-added services like global capability centers (GCCs) in tier-II cities. India aims to enhance its tourism industry, targeting a $1 trillion addition to GDP by 2047. Manufacturing has been a key driver of gross value added (GVA) growth, supported by a thriving construction sector. The outlook for both sectors appears promising in the near term.
Commercial real estate in satellite and tier-II cities is evolving due to improved infrastructure, urban planning, and cost advantages. The services sector, led by finance, insurance, real estate, and business services, has maintained growth rates similar to pre-pandemic levels.
While agriculture showed muted activity, expectations are positive for a stronger performance in 2024-25. The timely onset of the southwest monsoon, as predicted by the India Meteorological Department (IMD), is beneficial for kharif sowing and water reservoir levels. This sets a favorable stage for achieving the foodgrains target of 340 million tonnes for the 2024-25 crop year.
