NEW DELHI: The government is satisfied with its estimate of 6.5% growth for 2023-2024, but the recent surge in growth global crude oil prices This is a concern, but not yet alarming, according to the Ministry of Finance’s monthly economic report for August.
‘As always, risks remain. Rough oil prices rising steadily. The monsoon deficit in August could impact both Kharif and Rabi crops. That needs to be assessed. However, it is encouraging that the September rains have erased some of the rainfall deficit seen at the end of August,” the report said.
“A stock market correction, in the wake of an overdue global stock market correction, is an ever-present risk. These risks are offset by the bright spots of corporate profitability, private sector capital formation, bank credit growth and construction sector activity. ” it said.
According to the report, India’s economic outlook for FY24 remains bright and economic activity maintained its momentum. It was further stated that the high frequency indicators indicate that the second quarter of FY24 is also developing well. The August monsoon deficit was partially closed in September and that is good news.
“Prices of select food items that pushed inflation above 7% in July are declining. The private sector is in good health, as evidenced by tax prepayment data for the second quarter. They are investing,” it said report.
The report said the risks of a stock market correction and geopolitical developments could potentially damage investment sentiment in the second half of the financial year. “But the impact of these developments on underlying economic activity in India should remain relatively limited,” the Economic Affairs Ministry report said.
It said the structural reforms undertaken to promote ease of doing business, logistics efficiency and infrastructure creation are accelerating job creation and formalization of the economy. “The problems faced by unorganized workers resulted in the creation of a comprehensive database of e-Shram Portal (with over 29 crore registrations) and a large number of tailor-made social security schemes,” the report said.
‘As always, risks remain. Rough oil prices rising steadily. The monsoon deficit in August could impact both Kharif and Rabi crops. That needs to be assessed. However, it is encouraging that the September rains have erased some of the rainfall deficit seen at the end of August,” the report said.
“A stock market correction, in the wake of an overdue global stock market correction, is an ever-present risk. These risks are offset by the bright spots of corporate profitability, private sector capital formation, bank credit growth and construction sector activity. ” it said.
According to the report, India’s economic outlook for FY24 remains bright and economic activity maintained its momentum. It was further stated that the high frequency indicators indicate that the second quarter of FY24 is also developing well. The August monsoon deficit was partially closed in September and that is good news.
“Prices of select food items that pushed inflation above 7% in July are declining. The private sector is in good health, as evidenced by tax prepayment data for the second quarter. They are investing,” it said report.
The report said the risks of a stock market correction and geopolitical developments could potentially damage investment sentiment in the second half of the financial year. “But the impact of these developments on underlying economic activity in India should remain relatively limited,” the Economic Affairs Ministry report said.
It said the structural reforms undertaken to promote ease of doing business, logistics efficiency and infrastructure creation are accelerating job creation and formalization of the economy. “The problems faced by unorganized workers resulted in the creation of a comprehensive database of e-Shram Portal (with over 29 crore registrations) and a large number of tailor-made social security schemes,” the report said.
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