Strong domestic demand drove the economy to an increase of 7 percent growth rate in the last three years.
India's economy grew by 7.2 percent in 2022-23 and 8.7 percent in 2021-22. In the current financial year 2023-24, the Indian economy is expected to grow at 7.3 percent, remaining the fastest growing major economy.
The robustness of domestic demand – private consumption and investment – is due to the reforms and measures that the government has implemented over the last decade, said the Ministry of Economic Affairs report.
“The supply side has also been strengthened with investments in physical and digital infrastructure and measures to boost production. These have collectively provided stimulus to economic activity in the country,” the review report said.
“Accordingly, real GDP growth is likely to be closer to 7 per cent in FY25.”
However, there is significant scope for the growth rate to increase to well over 7 percent by 2030, the report continues.
“The rapidly growing digital infrastructure continuously improves institutional efficiency. Technological progress is accelerating as a result of increasing collaboration with foreign partners in the production of goods and services. Significant steps have been taken to accelerate human capital formation. And finally, the general investment climate is becoming increasingly more favorable and business transactions are sustainably improved.
In the next three years, India is expected to become the world's third-largest economy with a GDP of $5 trillion, it said.
India can aim for a $7 trillion economy in the next six to seven years (by 2030), it said.
“This will be a significant milestone towards achieving a quality of life and standard of living that meets and exceeds the expectations of the Indian people.”
Firm GDP growth forecasts, manageable inflation, policy stability at the central government level and signs that the central bank is done tightening its monetary policy have all helped paint a positive picture for the Indian economy.
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