On-target growth: 8% plus in 2023-24?
Finance minister Nirmala Sitharaman has hinted that India’s economy will see gross domestic product (GDP) expand 8% or more in the three months ended 31 March. “Hopefully, the fourth quarter… will also have (growth of) 8% or above 8%, resulting in 2023-24 having an average growth in GDP of 8% or over 8%," she said at a Mint summit on Saturday. This sends an optimistic signal on our post-pandemic growth momentum.
Note, the statistics ministry’s full year GDP forecast is 7.6%. If 8% expansion materializes, it would be impressive. To this robust pace, we might see tailwinds in 2024-25 once interest rates globally begin to decline.
That said, there are still some counts on which India needs to buck up. Capital investment and rural consumption, for example. Further, for long-term growth sustainability, structural reforms would be key—in factor markets, especially.
We need a better-skilled workforce for an upcoming era of artificial intelligence. Former Reserve Bank of India governor Raghuram Rajan recently cautioned us about hype by politicians over India’s growth. While his views have split the economic world, it may be prudent to use them as food for thought.
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