Indian economy to grow at 6.5% real GDP for FY24: Finance Ministry

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ALSO READ: Economic outlook bright but high oil prices a concern: FinMin The report said that as strengthening consumption led to a rise in demand for goods and services, both the manufacturing and the services sectors saw their output and value-added grow robustly in Q1 of FY24. It added that the strength of domestic investment is the result of the government’s continued emphasis on capital expenditure and the measures implemented by the Union government have also incentivised States to increase their capex spending.

As services exports have performed well, the contribution of net exports to GDP growth has increased in Q1 of FY24, said the report, adding, "HFIs for July/August 2023 reflects the sustenance of growth momentum in Q2 of FY24." In the banking sector, the report said that a variety of indicators suggest increasing resilience of the sector through declining Non-Performing Assets (NPA), improving Capital Risk-weighted Asset Ratio (CRAR), rising Return on Assets (RoA), and Return on Equity (RoE) as of March 2023. While data for Non-Banking Finance Companies (NBFCs) indicated improvements in their profitability and risk-taking behavior.

It cited the RBI estimates of July 2023 where consistent and broad-based growth in the non-food bank credit of Scheduled Commercial Banks (SCBs) since April 2022 was shown. “Robust health of the banking system can be attributed to the deleveraging process undertaken by the corporate sector over the previous decade," the report said, adding that the growth momentum for the private non-financial companies continued from the last quarter of FY23 into the first quarter of FY24.