New Delhi: Finance Minister Nirmala Sitharaman on Thursday asserted that India's macroeconomic fundamentals are stronger than ever, with the economy successfully navigating global challenges to maintain a high-growth trajectory. She emphasized that this has improved the country's potential GDP growth to 7%, showcasing resilience amid worldwide economic uncertainties.
Inflation Management and Growth Outlook
In a series of social media posts, Sitharaman highlighted that while many emerging markets have struggled in the current global environment, India has distinguished itself through effective inflation management without sacrificing growth. The government's proactive supply-side strategies have driven inflation down to historic lows, with recent data showing it moderated to 1.3% as food prices declined.
This reduction in inflation has created additional room for higher consumption spending, further supported by last year's cuts in income tax and GST rates. The Economic Survey noted that consumption has surged significantly, while investment levels have remained steady, helping to sustain the overall growth momentum.
Projected Economic Growth and Fiscal Targets
The Indian economy is estimated to grow by 7.4% in the current year, according to official projections. Looking ahead, the survey forecasts growth between 6.8% and 7.2% during the next financial year, indicating continued positive momentum.
Citing figures from the comprehensive 687-page Economic Survey document, Sitharaman reaffirmed the government's commitment to fiscal consolidation while maintaining growth objectives. Ahead of presenting her ninth consecutive budget this Sunday, she stated that the fiscal deficit target of 4.4% of GDP "is well on track," offering reassurance to market participants despite some slowdown in tax collections.
Focus on Deregulation and Manufacturing Strengthening
The finance minister reiterated her emphasis on deregulation, a theme she had highlighted in her previous budget. She explained that the Economic Survey outlines a progression from 'swadeshi' to 'strategic resilience' and ultimately to 'strategic indispensability.'
"This progression will ensure the world moves from 'thinking about buying Indian' to 'buying Indian without thinking,'" Sitharaman stated. In this context, she detailed how the government has been focusing on deregulation and strengthening the manufacturing sector through various strategic measures designed to enhance India's global economic position.
Human Capital Development and Demographic Dividend
Sitharaman also pointed to efforts in strengthening human capital as crucial contributors to sustaining India's growth trajectory. She noted visible gains in education and health outcomes that demonstrate this progress.
"The survey underscores that these investments are converting India's demographic dividend into a durable development dividend driven by healthier, quality-educated citizens," the finance minister explained, highlighting the long-term benefits of focused human development initiatives.
Budget Context and Reform Expectations
The upcoming budget presentation occurs at a time when India's economy demonstrates remarkable resilience despite increasing global challenges. This environment may prompt the government to introduce deeper reform measures aimed at further strengthening economic foundations and addressing emerging international pressures.
Sitharaman's statements collectively paint a picture of an economy positioned for sustained growth, with careful management of inflation, fiscal discipline, and strategic focus on manufacturing and human development forming key pillars of the government's economic strategy.
