CONTINUE PRIORITISATION OF CAPITAL EXPENDITURE

The government's decision to frontload capital spending this year, which is budgeted to grow 37.4 per cent in FY24, has been the main growth driver

- D.K. SRIVASTAVA

WITH THE GENERAL elections scheduled for May 2024, the Government of India (GoI) will present an Interim Budget in February 2024 and the main budget possibly in July 2024. The economy, as per RBI’s projections, is expected to show a growth of 7 per cent in FY24 in spite of the ongoing global geopolitical uncertainties, increasing its earlier forecast of 6.5 per cent.

The ADB, in its December 2023 release of the Asian Development Outlook has projected India’s growth at 6.7 per cent for FY24. Some of the high frequency indicators confirm this growth optimism. In November 2023, both manufacturing and services PMI remained at high levels of 56 and 56.9 respectively. Gross GST collections remained high at Rs1.67 lakh crore in November 2023 as compared to Rs1.72 lakh crore in October 2023.

Continuing Global Drag

The global situation continues to cause concern. The Organisation for Economic Co-operation and Development (OECD), in November 2023 issue of the Economic Outlook has projected global growth to fall from 3.3 per cent in 2022 to 2.9 per cent in 2023 and further to 2.7 per cent in 2024, the lowest annual rate since the global financial crisis other than the first year of the pandemic.