India's economic growth is likely to reach nearly 6.9 per cent for the 2027 fiscal year, a decrease from the previous forecast of 7.2 per cent. The prediction of a decline in growth rate came as energy supply disruptions began to affect industrial production. An ICICI Bank report indicated that the impact on India's economy will likely remain concentrated in March and April, along with a gradual decline in supply constraints expected in the next few months.&nbsp;"We expect the impact on the economy to be concentrated in March and April, with gradual easing of supply in the coming months. This should have an impact on growth in Q4FY26 and Q1FY27. Given the impact is limited in the two quarters, we expect FY27 growth at around 6.9% as against 7.2% earlier," the news agency ANI cited ICICI Bank report.&nbsp;The revised growth estimates came with a significant change in the global energy landscape. "Limited impact on growth is on account of the implicit assumption that oil prices settle around USD 85/bbl. With supply lines improving in the coming weeks in comparison to our earlier scenario of oil prices averaging USD 70/bbl," the report explained.<h3>Rising geopolitical tensions affect India's growth path</h3>The report said the revision was driven by the immediate impact of rising costs, even as supply chains are expected to stabilise in the near future. Before the recent geopolitical tensions, India’s economy was on a strong growth path, recording a year-on-year expansion of 7.8 per cent in December 2025. Data from January and February also indicated that core economic activity remained resilient.&nbsp;"However, since the advent of war, the supply of energy products has been impacted, in particular LNG and LPG. Flash manufacturing PMI for March is already showing an impact with the index decelerating to 53.8 from 56.9 in the previous month," the report stated.&nbsp;However, industrial sectors are now facing the greatest strain from energy shortages. While the government has prioritised LNG and LPG supplies for households, this has led to reduced availability for industries. As a result, production in sectors such as fertiliser, metals, ceramics, restaurants and glass could be affected. The report highlighted a similar pattern in 2022, when high gas prices slowed manufacturing growth to 1.7 per cent in FY23, compared to 10 per cent in the preceding year.&nbsp;Also read:<a href="https://www.wionews.com/india-news/indian-space-station-development-launch-of-first-module-to-cost-187mn-1774509840923"> Indian Space Station: Development &amp; launch of first module to cost $187mn</a>

The report said the revision was driven by the immediate impact of rising costs, even as supply chains are expected to stabilise in the near future. The revised growth estimates came with a significant change in the global energy landscape.

India's economic growth is likely to reach nearly 6.9 per cent for the 2027 fiscal year, a decrease from the previous forecast of 7.2 per cent. The prediction of a decline in growth rate came as energy supply disruptions began to affect industrial production. An ICICI Bank report indicated that the impact on India's economy will likely remain concentrated in March and April, along with a gradual decline in supply constraints expected in the next few months. "We expect the impact on the economy to be concentrated in March and April, with gradual easing of supply in the coming months. This should have an impact on growth in Q4FY26 and Q1FY27. Given the impact is limited in the two quarters, we expect FY27 growth at around 6.9% as against 7.2% earlier," the news agency ANI cited ICICI Bank report. The revised growth estimates came with a significant change in the global energy landscape. "Limited impact on growth is on account of the implicit assumption that oil prices settle around USD 85/bbl. With supply lines improving in the coming weeks in comparison to our earlier scenario of oil prices averaging USD 70/bbl," the report explained. Rising geopolitical tensions affect India's growth path The report said the revision was driven by the immediate impact of rising costs, even as supply chains are expected to stabilise in the near future. Before the recent geopolitical tensions, India’s economy was on a strong growth path, recording a year-on-year expansion of 7.8 per cent in December 2025. Data from January and February also indicated that core economic activity remained resilient. "However, since the advent of war, the supply of energy products has been impacted, in particular LNG and LPG. Flash manufacturing PMI for March is already showing an impact with the index decelerating to 53.8 from 56.9 in the previous month," the report stated. However, industrial sectors are now facing the greatest strain from energy shortages. While the government has prioritised LNG and LPG supplies for households, this has led to reduced availability for industries. As a result, production in sectors such as fertiliser, metals, ceramics, restaurants and glass could be affected. The report highlighted a similar pattern in 2022, when high gas prices slowed manufacturing growth to 1.7 per cent in FY23, compared to 10 per cent in the preceding year. Also read: Indian Space Station: Development & launch of first module to cost $187mn

The report said the revision was driven by the immediate impact of rising costs, even as supply chains are expected to stabilise in the near future. The revised growth estimates came with a significant change in the global energy landscape.

India’s FY27 growth forecast cut to 6.9% as energy crunch hits industry: ICICI Bank report

India on Wednesday forecast economic growth of 7.4 per cent for the 2025–26 fiscal year, highlighting the resilience of Asia’s third-largest economy despite a global slowdown and tight financial conditions amid tight tariff pressure under US President Donald Trump.&nbsp;According to a report in ET, the estimate is marginally higher than the Reserve Bank of India's latest projection of 7.3 per cent, and exceeds last year's 6.5 per cent growth. Nominal GDP, which includes inflation, is expected to moderate to 8 per cent for this fiscal year from 9.7 per cent a year earlier. These numbers will form the base ‍for ⁠the ⁠federal union budget due to be announced on February 1.&nbsp;In the second quarter of FY26, India’s economic momentum picked up pace with GDP growth growing to a six-quarter high of 8.2 per cent, improving on the 7.8 per cent improving in the April–June quarter. In the last two fiscals, India had recorded growth of 6.5 per cent and 9.2 per cent.<h3>The economy of India remains robust</h3>The data indicated that the economy of India remains robust at a time of global uncertainty, supported by a resilient services sector, raising investment and focused government spending. Higher industrial output, improved credit availability and continued structural reforms are helping sustain growth, keeping India among Asia’s fastest-growing major economies despite mounting external challenges.&nbsp;The government came up with the income tax relief for the middle class and lowered GST rates during the fiscal year across a wide range of products from September 22, prompting to ease the prices at the retail level. Industry executives stated that the twin measures assisted in reviving demand by including more disposable income in the hands of consumers and reducing the everyday cost of goods.&nbsp;The data also showed that real Gross Value Added (GVA) is projected to rise by 7.3 per cent in FY26, compared with 6.4 per cent in FY25. Meanwhile, nominal GVA growth is expected to slow to 7.7 per cent this fiscal from 9.3 per cent in the previous year. Government expenditure is forecast to increase by 5.2 per cent in 2025–26, up sharply from a 2.3 per cent rise last year.

The estimate is marginally higher than the Reserve Bank of India's latest projection of 7.3 per cent, and exceeds last year's 6.5 per cent growth. Nominal GDP, which includes inflation, is expected to moderate to 8 per cent for this fiscal year from 9.7 per cent a year earlier.

India on Wednesday forecast economic growth of 7.4 per cent for the 2025–26 fiscal year, highlighting the resilience of Asia’s third-largest economy despite a global slowdown and tight financial conditions amid tight tariff pressure under US President Donald Trump. According to a report in ET, the estimate is marginally higher than the Reserve Bank of India's latest projection of 7.3 per cent, and exceeds last year's 6.5 per cent growth. Nominal GDP, which includes inflation, is expected to moderate to 8 per cent for this fiscal year from 9.7 per cent a year earlier. These numbers will form the base ‍for ⁠the ⁠federal union budget due to be announced on February 1. In the second quarter of FY26, India’s economic momentum picked up pace with GDP growth growing to a six-quarter high of 8.2 per cent, improving on the 7.8 per cent improving in the April–June quarter. In the last two fiscals, India had recorded growth of 6.5 per cent and 9.2 per cent. The economy of India remains robust The data indicated that the economy of India remains robust at a time of global uncertainty, supported by a resilient services sector, raising investment and focused government spending. Higher industrial output, improved credit availability and continued structural reforms are helping sustain growth, keeping India among Asia’s fastest-growing major economies despite mounting external challenges. The government came up with the income tax relief for the middle class and lowered GST rates during the fiscal year across a wide range of products from September 22, prompting to ease the prices at the retail level. Industry executives stated that the twin measures assisted in reviving demand by including more disposable income in the hands of consumers and reducing the everyday cost of goods. The data also showed that real Gross Value Added (GVA) is projected to rise by 7.3 per cent in FY26, compared with 6.4 per cent in FY25. Meanwhile, nominal GVA growth is expected to slow to 7.7 per cent this fiscal from 9.3 per cent in the previous year. Government expenditure is forecast to increase by 5.2 per cent in 2025–26, up sharply from a 2.3 per cent rise last year.

The estimate is marginally higher than the Reserve Bank of India's latest projection of 7.3 per cent, and exceeds last year's 6.5 per cent growth. Nominal GDP, which includes inflation, is expected to moderate to 8 per cent for this fiscal year from 9.7 per cent a year earlier.

India projects strong 7.4% GDP growth for FY26 despite tariff row, outpacing RBI forecast

India’s economy likely expanded 6.7 per cent year-on-year in the January–March quarter, up from 6.2 per cent in the previous quarter, according to a Reuters poll of 56 economists conducted between May 19 and 23.&nbsp;The improvement of Asia’s third-largest Gross Domestic Product (GDP) is reportedly attributed to better agricultural output and a modest pickup in rural demand, even as urban consumption remained sluggish. This acceleration comes at a time when global economic uncertainty is rising, particularly in light of escalating trade tensions triggered by US President Donald Trump’s tariff threats.<h2>What does the poll says?</h2>According to the Reuters poll, rural consumption saw signs of recovery thanks to stronger crop yields and easing inflation. “We are seeing some signs of a pickup on the rural side, by the fact that crop output is better, followed by moderation in inflation pressures,” said Gaura Sengupta, Chief Economist at IDFC First Bank, as quoted by Reuters.&nbsp;Economists at Citi also told Reuters that “resilient agricultural activity continues to bode well for rural consumption,” but flagged that urban demand is still soft, adding they “remain bearish on urban consumption” for the first half of the current fiscal year.&nbsp;While headline GDP is projected to grow 6.7 per cent, Gross Value Added (GVA), a metric that excludes taxes and subsidies is expected to show a more modest rise of 6.4 per cent, Reuters reported.&nbsp;Anubhuti Sahay, Head of India Economic Research at Standard Chartered, told Reuters that much of the GDP boost could be driven by lower subsidy payouts: “Any growth improvement was mainly driven by the positive impact of net indirect taxes as subsidy payments were significantly lower during the period.”<h2>IMF and RBI outlook on India</h2> The International Monetary Fund (IMF) has projected India’s GDP growth at 6.8 per cent for FY25, supported by a strong services sector, robust domestic demand, and demographic advantages. However, the IMF has also cautioned that geopolitical tensions and protectionist policies could pose downside risks.&nbsp;The Reserve Bank of India (RBI), which is expected to cut interest rates for a third consecutive time in June. The central bank has also reiterated that a revival in domestic demand and private investment is critical to sustaining momentum.<h2>Global uncertainty looms large</h2>As per the Reuters report, economists remain concerned about Trump’s intensifying trade war and its ripple effects. The US president has threatened steep tariffs on goods from the European Union and China, while also targeting global tech firms.&nbsp;“Private investments … whatever interest rate cuts you do, I don’t think will move significantly higher simply because private investments will be determined more by a relatively certain atmosphere,” said Indranil Pan, Chief Economist at Yes Bank, in an interview with Reuters.&nbsp;In a separate Reuters survey last month, businesses flagged the negative impact of US tariff policies on global sentiment, a trend that could stall India’s long-anticipated private investment revival.&nbsp;“The recovery is possibly more in numbers than in real improvement in activity,” noted Kunal Kundu, India Economist at Societe Generale, speaking to Reuters. “Weak investment prospects, exacerbated by struggling manufacturing, suggest a growth recovery is multiple quarters away.” The National Statistical Office (NSO) is scheduled to release the official GDP data for the March quarter on May 31. Economists will be watching closely to assess the durability of the rural rebound and the real depth of India’s growth momentum as global headwinds persist. &nbsp;

Business & Economy: The improvement of Asia third-largest Gross Domestic Product (GDP) is reportedly attributed to better agricultural output and a modest pickup in rural demand, even as urban consumption remained sluggish.

India’s economy likely expanded 6.7 per cent year-on-year in the January–March quarter, up from 6.2 per cent in the previous quarter, according to a Reuters poll of 56 economists conducted between May 19 and 23. The improvement of Asia’s third-largest Gross Domestic Product (GDP) is reportedly attributed to better agricultural output and a modest pickup in rural demand, even as urban consumption remained sluggish. This acceleration comes at a time when global economic uncertainty is rising, particularly in light of escalating trade tensions triggered by US President Donald Trump’s tariff threats. What does the poll says? According to the Reuters poll, rural consumption saw signs of recovery thanks to stronger crop yields and easing inflation. “We are seeing some signs of a pickup on the rural side, by the fact that crop output is better, followed by moderation in inflation pressures,” said Gaura Sengupta, Chief Economist at IDFC First Bank, as quoted by Reuters. Economists at Citi also told Reuters that “resilient agricultural activity continues to bode well for rural consumption,” but flagged that urban demand is still soft, adding they “remain bearish on urban consumption” for the first half of the current fiscal year. While headline GDP is projected to grow 6.7 per cent, Gross Value Added (GVA), a metric that excludes taxes and subsidies is expected to show a more modest rise of 6.4 per cent, Reuters reported. Anubhuti Sahay, Head of India Economic Research at Standard Chartered, told Reuters that much of the GDP boost could be driven by lower subsidy payouts: “Any growth improvement was mainly driven by the positive impact of net indirect taxes as subsidy payments were significantly lower during the period.” IMF and RBI outlook on India The International Monetary Fund (IMF) has projected India’s GDP growth at 6.8 per cent for FY25, supported by a strong services sector, robust domestic demand, and demographic advantages. However, the IMF has also cautioned that geopolitical tensions and protectionist policies could pose downside risks. The Reserve Bank of India (RBI), which is expected to cut interest rates for a third consecutive time in June. The central bank has also reiterated that a revival in domestic demand and private investment is critical to sustaining momentum. Global uncertainty looms large As per the Reuters report, economists remain concerned about Trump’s intensifying trade war and its ripple effects. The US president has threatened steep tariffs on goods from the European Union and China, while also targeting global tech firms. “Private investments … whatever interest rate cuts you do, I don’t think will move significantly higher simply because private investments will be determined more by a relatively certain atmosphere,” said Indranil Pan, Chief Economist at Yes Bank, in an interview with Reuters. In a separate Reuters survey last month, businesses flagged the negative impact of US tariff policies on global sentiment, a trend that could stall India’s long-anticipated private investment revival. “The recovery is possibly more in numbers than in real improvement in activity,” noted Kunal Kundu, India Economist at Societe Generale, speaking to Reuters. “Weak investment prospects, exacerbated by struggling manufacturing, suggest a growth recovery is multiple quarters away.” The National Statistical Office (NSO) is scheduled to release the official GDP data for the March quarter on May 31. Economists will be watching closely to assess the durability of the rural rebound and the real depth of India’s growth momentum as global headwinds persist.

Amid global trade tension, Reuters poll says that India's GDP likely expanded 6.7 per cent year-on-year in the January–March quarter.&nbsp;

India’s Jan–March GDP growth seen at 6.7% on rural boost

India's economic growth is stalling as consumer demand is slowing. The broad expectations from the budget include a boost to consumption through corporate and personal tax cuts.
India's growth story is showing signs of cracks. Analysts expect the government to do something about it in the upcoming budget later this week.
According to Nomura Holdings, the government is predicted to unveil business tax cuts in this week's budget. This is to revitalise a flagging economy.
<h2>Will India cut taxes to revive growth?</h2>
If implemented, the proposal may alleviate investor concerns by increasing business profits. However, concerns over such policies' efficiency in promoting growth have been raised.
Private investments have not recovered after the significant cut in corporate taxes in 2019. Signs of a slowdown in broader consumption are highlighted by Hindustan Unilever's lacklustre earnings in the December quarter.
This has the middle class looking for some tax break. Will the government give in to the middle class's hope to boost demand?
Poor revenue outlook and profit miss have been the narrative in the latest earnings round. For stock market bulls, this earnings season is shaping up to be a replay of the second quarter, signalling further downgrades.
Indian stocks have taken a beating, with the 2 trillion-dollar rally in the nifty index showing signs of cracks. A slowing economy, delayed government spending, and shrinking corporate profits have fuelled a selloff in domestic stocks in the new year.
With the budget around the corner, the government has a chance to reverse the flagging investor sentiment.
The real question is - Will it grab the opportunity?
(With inputs from the agencies)

Business & Economy: According to Nomura Holdings, the government is predicted to unveil business tax cuts in this week's budget. This is to revitalise a flagging economy.

India's economic growth is stalling as consumer demand is slowing. The broad expectations from the budget include a boost to consumption through corporate and personal tax cuts. India's growth story is showing signs of cracks. Analysts expect the government to do something about it in the upcoming budget later this week. According to Nomura Holdings, the government is predicted to unveil business tax cuts in this week's budget. This is to revitalise a flagging economy. Will India cut taxes to revive growth? If implemented, the proposal may alleviate investor concerns by increasing business profits. However, concerns over such policies' efficiency in promoting growth have been raised. Private investments have not recovered after the significant cut in corporate taxes in 2019. Signs of a slowdown in broader consumption are highlighted by Hindustan Unilever's lacklustre earnings in the December quarter. This has the middle class looking for some tax break. Will the government give in to the middle class's hope to boost demand? Poor revenue outlook and profit miss have been the narrative in the latest earnings round. For stock market bulls, this earnings season is shaping up to be a replay of the second quarter, signalling further downgrades. Indian stocks have taken a beating, with the 2 trillion-dollar rally in the nifty index showing signs of cracks. A slowing economy, delayed government spending, and shrinking corporate profits have fuelled a selloff in domestic stocks in the new year. With the budget around the corner, the government has a chance to reverse the flagging investor sentiment. The real question is - Will it grab the opportunity? (With inputs from the agencies)

Will the budget provide tax cuts to revive India's growth story?

In a significant boost to India's economic trajectory, the World Bank has upgraded its growth forecast for the financial year 2024-25 to 7 per cent, up from its earlier estimate of 6.6 per cent. This revision reflects the country's impressive economic performance, which has positioned India as the fastest-growing major economy globally.<o:p></o:p>

Strong economic foundations<o:p></o:p>

The Indian economy's robust growth is attributed to several key factors. In the financial year 2023-24, India achieved an impressive 8.2 per cent growth rate, driven by substantial public infrastructure investments and a surge in household real estate investments. The manufacturing sector played a crucial role, growing by 9.9 per cent, while resilient services activity helped offset the underperformance in the agriculture sector.<o:p></o:p>

"India was the fastest-growing major economy in FY24 at 8.2 per cent, and now it's growing at a good pace," noted Auguste Tano Kouame, the World Bank's Country Director for India. This growth momentum is expected to continue, with the World Bank projecting strong growth for FY26 and FY27 at 6.7 per cent and 6.8 per cent, respectively.<o:p></o:p>

Further, the medium-term outlook for India remains positive, despite global growth remaining subdued compared to pre-pandemic levels. The report highlights that sustained growth in the services sector, including the expansion of Global Capability Centers, and an expected strengthening of the manufacturing sector, will continue to drive economic expansion. Government initiatives such as the PM Gati Shakti master plan to enhance logistics infrastructure and the trade infrastructure for exports scheme are also expected to contribute significantly.<o:p></o:p>

One of the most promising aspects of India's economic growth is the decline in inflation. Headline inflation is expected to continue to decline from an average of 5.4 per cent in FY23-24 to 4.5 per cent in FY24-25. This decline, coupled with robust growth, is anticipated to reduce extreme and moderate poverty in the country.<o:p></o:p>

"India's robust growth prospects along with declining inflation will help to reduce extreme poverty," said Auguste Tano Kouame. He also emphasized the importance of diversifying India's export basket to include sectors such as textiles, apparel, footwear, electronics, and green technology to harness its global trade potential.<o:p></o:p>

Fiscal consolidation and trade opportunities<o:p></o:p>

The World Bank report also underscores the importance of fiscal consolidation. With robust revenue growth and further fiscal consolidation, the debt-to-GDP ratio is projected to decline from 83.9 per cent in FY24 to 82 per cent by FY27. The current account deficit is expected to remain within the range of 1-1.6 per cent of GDP up to FY27.<o:p></o:p>

India's trade potential is another critical area highlighted in the report. The World Bank suggests that India can boost its growth further by integrating more deeply into global value chains, which will create opportunities for innovation and productivity growth. Reducing trade costs, lowering trade barriers, and deepening trade integration are recommended strategies to achieve the $1 trillion merchandise export target by 2030.<o:p></o:p>

While the outlook is positive, the report also acknowledges external risks such as geopolitical tensions and resurgent inflation, which could impact commodity prices and global interest rates. However, these risks are seen as manageable given India's strong economic fundamentals.<o:p></o:p>

<o:p>&nbsp;</o:p>

In a significant boost to India's economic trajectory, the World Bank has upgraded its growth forecast for the financial year 2024-25 to 7 per cent, up from its earlier estimate of 6.

In a significant boost to India's economic trajectory, the World Bank has upgraded its growth forecast for the financial year 2024-25 to 7 per cent, up from its earlier estimate of 6.6 per cent. This revision reflects the country's impressive economic performance, which has positioned India as the fastest-growing major economy globally. Strong economic foundations The Indian economy's robust growth is attributed to several key factors. In the financial year 2023-24, India achieved an impressive 8.2 per cent growth rate, driven by substantial public infrastructure investments and a surge in household real estate investments. The manufacturing sector played a crucial role, growing by 9.9 per cent, while resilient services activity helped offset the underperformance in the agriculture sector. "India was the fastest-growing major economy in FY24 at 8.2 per cent, and now it's growing at a good pace," noted Auguste Tano Kouame, the World Bank's Country Director for India. This growth momentum is expected to continue, with the World Bank projecting strong growth for FY26 and FY27 at 6.7 per cent and 6.8 per cent, respectively. Further, the medium-term outlook for India remains positive, despite global growth remaining subdued compared to pre-pandemic levels. The report highlights that sustained growth in the services sector, including the expansion of Global Capability Centers, and an expected strengthening of the manufacturing sector, will continue to drive economic expansion. Government initiatives such as the PM Gati Shakti master plan to enhance logistics infrastructure and the trade infrastructure for exports scheme are also expected to contribute significantly. One of the most promising aspects of India's economic growth is the decline in inflation. Headline inflation is expected to continue to decline from an average of 5.4 per cent in FY23-24 to 4.5 per cent in FY24-25. This decline, coupled with robust growth, is anticipated to reduce extreme and moderate poverty in the country. "India's robust growth prospects along with declining inflation will help to reduce extreme poverty," said Auguste Tano Kouame. He also emphasized the importance of diversifying India's export basket to include sectors such as textiles, apparel, footwear, electronics, and green technology to harness its global trade potential. Fiscal consolidation and trade opportunities The World Bank report also underscores the importance of fiscal consolidation. With robust revenue growth and further fiscal consolidation, the debt-to-GDP ratio is projected to decline from 83.9 per cent in FY24 to 82 per cent by FY27. The current account deficit is expected to remain within the range of 1-1.6 per cent of GDP up to FY27. India's trade potential is another critical area highlighted in the report. The World Bank suggests that India can boost its growth further by integrating more deeply into global value chains, which will create opportunities for innovation and productivity growth. Reducing trade costs, lowering trade barriers, and deepening trade integration are recommended strategies to achieve the $1 trillion merchandise export target by 2030. While the outlook is positive, the report also acknowledges external risks such as geopolitical tensions and resurgent inflation, which could impact commodity prices and global interest rates. However, these risks are seen as manageable given India's strong economic fundamentals.

World Bank boosts India's FY25 growth forecast to 7%, citing robust economic performance

The Union budget to be presented by the Union Finance Minister, Nirmala Sitharaman, is redolent with an amalgamation of infrastructural and long-term reform-intensive measures. As one waits for the same contours, it would be pertinent to take a look at the sources of revenue available to the government and trends in expenditure.

It is interesting to note that the single largest share of the government's income, at 28 per cent, is from borrowings and other liabilities. Income tax and GST each contribute 18 per cent, while corporation tax accounts for 17 per cent. Non-tax receipts, including rent and fines account for 7 per cent of the income. Union excise duties contribute 5 per cent and customs 4 per cent, with non-debt capital receipts at 1 per cent.

The break-up on the expenditure side is: 20 per cent for interest payments and the equal amount is distributed among states as taxes and duties. Central sector schemes gobble up 16 per cent of the total expenditure. Other important allocations go toward other expenditures at 9 per cent, defence and centrally-sponsored schemes at 8 per cent each, and subsidies at 6 per cent.

Minister Sitharaman expressed that the Indian economy has undergone a considerable transformation for good over the last decade. This would, therefore, be the principal role that this coming budget would play in continuing the impetus and acting as a backbone for further improvement of the economy. The concentration on infrastructure and long-term reforms is thus envisioned to lay a platform for continuous growth in the Indian economy.

The Union budget to be presented by the Union Finance Minister, Nirmala Sitharaman, is redolent with an amalgamation of infrastructural and long-term reform-intensive measures.

The Union budget to be presented by the Union Finance Minister, Nirmala Sitharaman, is redolent with an amalgamation of infrastructural and long-term reform-intensive measures. As one waits for the same contours, it would be pertinent to take a look at the sources of revenue available to the government and trends in expenditure. It is interesting to note that the single largest share of the government's income, at 28 per cent, is from borrowings and other liabilities. Income tax and GST each contribute 18 per cent, while corporation tax accounts for 17 per cent. Non-tax receipts, including rent and fines account for 7 per cent of the income. Union excise duties contribute 5 per cent and customs 4 per cent, with non-debt capital receipts at 1 per cent. The break-up on the expenditure side is: 20 per cent for interest payments and the equal amount is distributed among states as taxes and duties. Central sector schemes gobble up 16 per cent of the total expenditure. Other important allocations go toward other expenditures at 9 per cent, defence and centrally-sponsored schemes at 8 per cent each, and subsidies at 6 per cent. Minister Sitharaman expressed that the Indian economy has undergone a considerable transformation for good over the last decade. This would, therefore, be the principal role that this coming budget would play in continuing the impetus and acting as a backbone for further improvement of the economy. The concentration on infrastructure and long-term reforms is thus envisioned to lay a platform for continuous growth in the Indian economy.

Unveiling the fiscal blueprint: Analysing India’s economic strategy and revenue sources

Fidelity International and BlackRock Investment Institute have reported that emerging nations with strong population growth, such as India and Indonesia, are becoming more appealing to investors as demographic concerns begin to impact investment decisions.

Investment in these two growing Asian countries is encouraged by anticipated increases in infrastructure spending, which are expected to revitalise their economies. Recent elections in India and Indonesia have underlined their ambitions to become major economic powers, with their dynamic populations serving as a critical strength.

Among the rapidly ageing regional peers, China, India, and Indonesia stand out. India surpassed China as the world's most populated country in mid-2023, prompting a rush to find prospective South Asian stock market winners.

According to BlackRock's data, there is a favourable association between a country's working-age population growth and share price valuations. Fidelity sees the financial sector as a big benefit, with rising credit demand from both firms and consumers.

"India and Indonesia's labour forces are young, with demographic dividends that far outweigh some of the region's largest economies," said Ian Samson, a portfolio manager at Fidelity in Singapore. "All businesses, large and small, require capital. This helps to explain why bank equities tend to correspond with GDP growth in emerging markets.”

According to World Bank estimates, India and Indonesia are forecast to witness population rises of at least 10 per cent between this year and 2040, while China is expected to see a roughly 4 per cent fall. More importantly, India's working-age population (those aged 15 to 64) is growing, and the country has the youngest demographic of any major economy.

In March, BlackRock Investment Institute strategists led by Jean Boivin noted that a faster rise in the working-age population frequently correlates to stronger future profit growth. They also identified migration, increased labour-force participation, and automation as key drivers.

The demographic dividend, coupled with other distinct characteristics such as favourable election results, is one of the primary drivers of gains in both countries' stock markets. The Nifty 50 Index, which is trading at record highs, is on track to extend its nine-year winning streak. Similarly, in March, the Jakarta Composite Index achieved a record high.

Analysts argue that structural reforms aimed at cutting regulatory red tape, increasing job market flexibility, and allowing foreign investment are vital for capitalising on the demographic advantage.

"Ultimately, the growth equation is employment times productivity," Fidelity's Samson explained. "The substantial structural reforms in both India and Indonesia will support sufficient job creation to benefit from the demographic dividend."

Despite improvement, more action is needed. Investors are paying special attention to whether Indian state governments would execute national-level labour, land, and policy changes. Indonesia's President-elect Prabowo Subianto, who will take office in October, has ambitious aspirations of achieving 8 per cent yearly GDP growth, despite the country's historically low performance.

For sovereign debt investors, the age-dependency ratio, which indicates the fraction of those who are too elderly or young to work, and the fiscal burden are critical long-term investment indicators.

According to Bloomberg data, global investors have invested $5.5 billion in Indian bonds this year, boosted by chances for index inclusion. India's interim budget, unveiled in February, prioritised infrastructure spending above populist initiatives ahead of the general election.

In contrast, international investors have withdrawn $1.8 billion from Indonesian bonds, citing concerns about the country's fiscal health because of the incoming administration's increased spending commitments.

"Aging populations increase the cost of healthcare and pensions, with developed-market economies providing more comprehensive social benefits than most emerging markets," said Sanjay Shah, director of fixed income at HSBC Global Asset Management. "In emerging markets, pension plans may be more staggered and less fixed-benefit oriented," Shah added, thereby lowering the public financial load.

(With inputs from Bloomberg)

Fidelity International and BlackRock Investment Institute have reported that emerging nations with strong population growth, such as India and Indonesia, are becoming more appealing to investors as demographic concerns begin to impact investment decisions.

Fidelity International and BlackRock Investment Institute have reported that emerging nations with strong population growth, such as India and Indonesia, are becoming more appealing to investors as demographic concerns begin to impact investment decisions. Investment in these two growing Asian countries is encouraged by anticipated increases in infrastructure spending, which are expected to revitalise their economies. Recent elections in India and Indonesia have underlined their ambitions to become major economic powers, with their dynamic populations serving as a critical strength. Among the rapidly ageing regional peers, China, India, and Indonesia stand out. India surpassed China as the world's most populated country in mid-2023, prompting a rush to find prospective South Asian stock market winners. According to BlackRock's data, there is a favourable association between a country's working-age population growth and share price valuations. Fidelity sees the financial sector as a big benefit, with rising credit demand from both firms and consumers. "India and Indonesia's labour forces are young, with demographic dividends that far outweigh some of the region's largest economies," said Ian Samson, a portfolio manager at Fidelity in Singapore. "All businesses, large and small, require capital. This helps to explain why bank equities tend to correspond with GDP growth in emerging markets.” According to World Bank estimates, India and Indonesia are forecast to witness population rises of at least 10 per cent between this year and 2040, while China is expected to see a roughly 4 per cent fall. More importantly, India's working-age population (those aged 15 to 64) is growing, and the country has the youngest demographic of any major economy. In March, BlackRock Investment Institute strategists led by Jean Boivin noted that a faster rise in the working-age population frequently correlates to stronger future profit growth. They also identified migration, increased labour-force participation, and automation as key drivers. The demographic dividend, coupled with other distinct characteristics such as favourable election results, is one of the primary drivers of gains in both countries' stock markets. The Nifty 50 Index, which is trading at record highs, is on track to extend its nine-year winning streak. Similarly, in March, the Jakarta Composite Index achieved a record high. Analysts argue that structural reforms aimed at cutting regulatory red tape, increasing job market flexibility, and allowing foreign investment are vital for capitalising on the demographic advantage. "Ultimately, the growth equation is employment times productivity," Fidelity's Samson explained. "The substantial structural reforms in both India and Indonesia will support sufficient job creation to benefit from the demographic dividend." Despite improvement, more action is needed. Investors are paying special attention to whether Indian state governments would execute national-level labour, land, and policy changes. Indonesia's President-elect Prabowo Subianto, who will take office in October, has ambitious aspirations of achieving 8 per cent yearly GDP growth, despite the country's historically low performance. For sovereign debt investors, the age-dependency ratio, which indicates the fraction of those who are too elderly or young to work, and the fiscal burden are critical long-term investment indicators. According to Bloomberg data, global investors have invested $5.5 billion in Indian bonds this year, boosted by chances for index inclusion. India's interim budget, unveiled in February, prioritised infrastructure spending above populist initiatives ahead of the general election. In contrast, international investors have withdrawn $1.8 billion from Indonesian bonds, citing concerns about the country's fiscal health because of the incoming administration's increased spending commitments. "Aging populations increase the cost of healthcare and pensions, with developed-market economies providing more comprehensive social benefits than most emerging markets," said Sanjay Shah, director of fixed income at HSBC Global Asset Management. "In emerging markets, pension plans may be more staggered and less fixed-benefit oriented," Shah added, thereby lowering the public financial load. (With inputs from Bloomberg)

Emerging markets India and Indonesia gain favour as demographics drive investment strategies

According to a Natixis SA report released on Monday, India will need to produce 115 million jobs by 2030 to meet its rising workforce. The report emphasizes the critical need for Asia's third-largest economy to increase growth in both services and manufacturing to maintain current economic progress.

According to Trinh Nguyen, a senior economist at Natixis, India will need to produce 16.5 million jobs every year, up from 12.4 million in the previous decade. Nguyen's research emphasised the necessity for 10.4 million of these jobs to emerge from the formal economy.

"To achieve this herculean task, India's growth engine needs to fire on all cylinders, from manufacturing to services in the next five years," Nguyen wrote in her study.

While India's economy is expected to develop by more than 7 per cent this year, one of the fastest rates in the world, this pace may be insufficient to offer employment for the country's 1.4 billion people. High youth unemployment remains a significant issue for Prime Minister Narendra Modi, who is running for a third term amidst ongoing national elections.

Despite the development of 112 million jobs over the last decade, Nguyen estimates that only approximately 10 per cent of these roles are official. According to World Bank data, the country's labour force participation rate is 58 per cent, which is much lower than that of other Asian nations.

Nguyen pointed out that the services industry, which accounts for more than half of India's GDP, has few chances in terms of headcount and labour quality. As a result, India must use its manufacturing sector to compete with companies and countries looking to diversify away from a China-centric supply chain.

"The incoming administration needs to jump on the manufacturing train and capitalize on demographic and geopolitical tailwinds," she added. "Even if the road forward is challenging, it is never too late to walk down the right path."

(With inputs from Bloomberg)

According to a Natixis SA report released on Monday, India will need to produce 115 million jobs by 2030 to meet its rising workforce. The report emphasizes the critical need for Asia's third-largest economy to increase growth in both services and manufacturing to maintain current economic progress.

According to a Natixis SA report released on Monday, India will need to produce 115 million jobs by 2030 to meet its rising workforce. The report emphasizes the critical need for Asia's third-largest economy to increase growth in both services and manufacturing to maintain current economic progress. According to Trinh Nguyen, a senior economist at Natixis, India will need to produce 16.5 million jobs every year, up from 12.4 million in the previous decade. Nguyen's research emphasised the necessity for 10.4 million of these jobs to emerge from the formal economy. "To achieve this herculean task, India's growth engine needs to fire on all cylinders, from manufacturing to services in the next five years," Nguyen wrote in her study. While India's economy is expected to develop by more than 7 per cent this year, one of the fastest rates in the world, this pace may be insufficient to offer employment for the country's 1.4 billion people. High youth unemployment remains a significant issue for Prime Minister Narendra Modi, who is running for a third term amidst ongoing national elections. Despite the development of 112 million jobs over the last decade, Nguyen estimates that only approximately 10 per cent of these roles are official. According to World Bank data, the country's labour force participation rate is 58 per cent, which is much lower than that of other Asian nations. Nguyen pointed out that the services industry, which accounts for more than half of India's GDP, has few chances in terms of headcount and labour quality. As a result, India must use its manufacturing sector to compete with companies and countries looking to diversify away from a China-centric supply chain. "The incoming administration needs to jump on the manufacturing train and capitalize on demographic and geopolitical tailwinds," she added. "Even if the road forward is challenging, it is never too late to walk down the right path." (With inputs from Bloomberg)

India must create 115 million jobs by 2030 to sustain economic growth, study finds

Moody's Investor Service has revised its gross domestic product (GDP) forecast for India, citing the impressive performance of the South Asian economy in recent quarters.&nbsp; 
 
The ratings agency now anticipates a sturdy growth trajectory extending into 2024.&nbsp; 
 
"India's economy has performed well, and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8 per cent from 6.1 per cent," Moody's stated.&nbsp; 
 
They also noted that India is confident to maintain its status as the fastest-growing economy among G-20 nations over the forecast period. 
 
India witnessed its economy expanding at its swiftest pace in a year and a half during the final quarter of 2023, driven notably by robust manufacturing and construction activity.&nbsp; 
 
The recorded growth rate of 8.4 per cent exceeded economists' projections of 6.6 per cent.&nbsp; 
 
Moody's pointed out that the momentum from the third and fourth quarters of 2023 has seamlessly flowed into the first quarter of the current calendar year, as evidenced by high-frequency indicators. 
 
"Robust goods and services tax collections, rising auto sales, consumer optimism, and double-digit credit growth suggest urban consumption demand remains resilient," Moody's observed.&nbsp; 
 
Moreover, indicators on the supply side such as expanding manufacturing and services PMIs further boosted the evidence of solid economic momentum.&nbsp; 
 
The agency stressed the continuation of policies post the upcoming general elections expected by May, along with a sustained emphasis on infrastructure development. 
 
Although private industrial capital spending has been sluggish, Moody's expects a rebound, fueled by ongoing benefits from supply chain diversification and the government's initiatives to bolster key manufacturing sectors.&nbsp; 
 
The agency puts a spotlight on rising capacity utilisation, strong credit growth, and upbeat business sentiment as indicative of an improving outlook for private investment.&nbsp; 
However, it noted that headline inflation in January eased slightly to 5.1 per cent but remains above the central bank's target of 4 per cent.&nbsp; 
 
Moody's suggested that given the solid growth dynamics and inflationary pressures, policy easing is not anticipated in the near term.&nbsp; 
 
(With inputs from Reuters)

Moody's Investor Service has revised its gross domestic product (GDP) forecast for India, citing the impressive performance of the South Asian economy in recent quarters.

Moody's Investor Service has revised its gross domestic product (GDP) forecast for India, citing the impressive performance of the South Asian economy in recent quarters. The ratings agency now anticipates a sturdy growth trajectory extending into 2024. "India's economy has performed well, and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8 per cent from 6.1 per cent," Moody's stated. They also noted that India is confident to maintain its status as the fastest-growing economy among G-20 nations over the forecast period. India witnessed its economy expanding at its swiftest pace in a year and a half during the final quarter of 2023, driven notably by robust manufacturing and construction activity. The recorded growth rate of 8.4 per cent exceeded economists' projections of 6.6 per cent. Moody's pointed out that the momentum from the third and fourth quarters of 2023 has seamlessly flowed into the first quarter of the current calendar year, as evidenced by high-frequency indicators. "Robust goods and services tax collections, rising auto sales, consumer optimism, and double-digit credit growth suggest urban consumption demand remains resilient," Moody's observed. Moreover, indicators on the supply side such as expanding manufacturing and services PMIs further boosted the evidence of solid economic momentum. The agency stressed the continuation of policies post the upcoming general elections expected by May, along with a sustained emphasis on infrastructure development. Although private industrial capital spending has been sluggish, Moody's expects a rebound, fueled by ongoing benefits from supply chain diversification and the government's initiatives to bolster key manufacturing sectors. The agency puts a spotlight on rising capacity utilisation, strong credit growth, and upbeat business sentiment as indicative of an improving outlook for private investment. However, it noted that headline inflation in January eased slightly to 5.1 per cent but remains above the central bank's target of 4 per cent. Moody's suggested that given the solid growth dynamics and inflationary pressures, policy easing is not anticipated in the near term. (With inputs from Reuters)

Moody's raises India's GDP forecast in the middle of strong economic momentum

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29)&nbsp;marking the fastest pace with which the economy grew in one-and-half years, beating all estimates.&nbsp;

<h2>India’s economic growth beats estimates</h2>

The economic growth reported for the third quarter was much higher than the estimated 6.6 per cent by economists, according to a&nbsp;Reuters poll.

It was also higher than the revised growth of 8.1 per cent in the previous quarter which stood at 7.6 per cent in the three months ending September 30.&nbsp;

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/decoding-the-modi-governments-white-paper-on-indian-economy-688601">Decoding the Modi government's white paper on Indian economy</a>

This growth has been attributed to strong manufacturing and construction activity in India.&nbsp;

Prime Minister Narendra Modi’s government has raised spending on infrastructure and incentivised manufacturing of phones, electronics, drones and semiconductors.&nbsp;

Manufacturing, over the past decade, has accounted for 17 per cent of India’s economy and expanded 11.6 per cent year-on-year in the December quarter.&nbsp;

Additionally, investment growth was above 10 per cent for the second consecutive quarter and the construction sector grew by more than nine per cent.&nbsp;

However, the farming sector which accounts for about 15 per cent of the Indian economy reduced by 0.8 per cent, compared with 1.6 per cent growth in the second quarter.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/oecd-raises-india-and-global-growth-outlook-for-2024-687238">OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'</a>

The “robust” third-quarter growth “shows the strength of Indian economy and its potential,” said PM Modi, in a post on X.&nbsp;

He added, “Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat (Developed India)!”&nbsp;

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Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!
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<h2>Growth estimates raised</h2>

The Ministry of Statistics and Programme Implementation data released on Thursday, also shows that the Indian economy is expected to grow&nbsp; at 7.6 per cent this year.&nbsp;

In its <a href="https://www.wionews.com/business-economy/indian-economy-to-grow-by-73-per-cent-says-governments-advance-estimate-676939">first estimates</a> released last month, the NSO had projected a growth of 7.3 per cent in 2023-24.&nbsp;

(With inputs from agencies) 
&nbsp;

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29) marking the fastest pace with which the economy grew in one-and-half years, beating all estimates.

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29) marking the fastest pace with which the economy grew in one-and-half years, beating all estimates. India’s economic growth beats estimates The economic growth reported for the third quarter was much higher than the estimated 6.6 per cent by economists, according to a Reuters poll. It was also higher than the revised growth of 8.1 per cent in the previous quarter which stood at 7.6 per cent in the three months ending September 30. Also Read | Decoding the Modi government's white paper on Indian economy This growth has been attributed to strong manufacturing and construction activity in India. Prime Minister Narendra Modi’s government has raised spending on infrastructure and incentivised manufacturing of phones, electronics, drones and semiconductors. Manufacturing, over the past decade, has accounted for 17 per cent of India’s economy and expanded 11.6 per cent year-on-year in the December quarter. Additionally, investment growth was above 10 per cent for the second consecutive quarter and the construction sector grew by more than nine per cent. However, the farming sector which accounts for about 15 per cent of the Indian economy reduced by 0.8 per cent, compared with 1.6 per cent growth in the second quarter. Also Read | OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk' The “robust” third-quarter growth “shows the strength of Indian economy and its potential,” said PM Modi, in a post on X. He added, “Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat (Developed India)!” Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat! — Narendra Modi (@narendramodi) February 29, 2024 × Growth estimates raised The Ministry of Statistics and Programme Implementation data released on Thursday, also shows that the Indian economy is expected to grow at 7.6 per cent this year. In its first estimates released last month, the NSO had projected a growth of 7.3 per cent in 2023-24. (With inputs from agencies)

India's GDP grew 8.4% in Q3; economy expected to grow 7.6% this year

Chinese state media praises India's economic growth, foreign policy under PM Modi. Watch the video to know more.

China media's rare praise for India; praises India's growth, foreign policies

India's economy outpaced analysts' predictions, registering robust growth of 7.6 per cent in the three months to September compared to a year ago, according to government data released on Thursday. <o:p></o:p>

The figure surpassed all estimates in a Bloomberg survey of economists and exceeded the Reserve Bank of India's projection of 6.5 per cent. Despite challenges like surging inflation and multiple interest rate hikes by the RBI, India retains its position as the fastest-growing major economy globally. <o:p></o:p>

The growth is attributed to factors such as strong manufacturing performance, increased consumption, and the Indian government's heightened spending ahead of upcoming elections.<o:p></o:p>

Bloomberg cited Madhavi Arora, an economist with Emkay Financial Services, who highlighted the factors driving India's buoyant growth, emphasising robust corporate profits, a strong fiscal impulse, and front-loaded government spending in a pre-election year. <o:p></o:p>

Prime Minister Narendra Modi's administration is actively investing in infrastructure and offering subsidies to attract companies to set up production in India. These initiatives, coupled with healthy consumption patterns, contribute to gains in private sector investments. Gross fixed capital formation, a proxy for investment, surged by 11.04 per cent compared to 7.95 per cent in the previous quarter.<o:p></o:p>

While the services sector, constituting over half of India's GDP, expanded at a slower pace due to moderating global demand for financial services, the manufacturing sector's significant growth played a pivotal role in overall economic expansion. Agriculture, however, experienced a slowdown attributed to below-normal rains, resulting in a weaker summer crop harvest.<o:p></o:p>

India faced its weakest monsoon rains in five years, leading to government interventions such as extending curbs on the export of farm commodities like sugar, rice, and wheat. The GDP figures, representing a sharp upside surprise, received positive reactions from economists, with Upasna Bhardwaj, an economist with Kotak Mahindra Bank Ltd., noting the broader economic pickup across most non-agricultural sectors.<o:p></o:p>

As India experiences this robust economic growth, the challenge remains for the Reserve Bank of India (RBI), which aims to bring down inflation to its 4 per cent target on a durable basis. The strong demand poses a dilemma for the central bank, which has maintained interest rates unchanged for four policy meetings.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

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India's economy outpaced analysts' predictions, registering robust growth of 7.6 per cent in the three months to September compared to a year ago, according to government data released on Thursday.

India's economy outpaced analysts' predictions, registering robust growth of 7.6 per cent in the three months to September compared to a year ago, according to government data released on Thursday. The figure surpassed all estimates in a Bloomberg survey of economists and exceeded the Reserve Bank of India's projection of 6.5 per cent. Despite challenges like surging inflation and multiple interest rate hikes by the RBI, India retains its position as the fastest-growing major economy globally. The growth is attributed to factors such as strong manufacturing performance, increased consumption, and the Indian government's heightened spending ahead of upcoming elections. Bloomberg cited Madhavi Arora, an economist with Emkay Financial Services, who highlighted the factors driving India's buoyant growth, emphasising robust corporate profits, a strong fiscal impulse, and front-loaded government spending in a pre-election year. Prime Minister Narendra Modi's administration is actively investing in infrastructure and offering subsidies to attract companies to set up production in India. These initiatives, coupled with healthy consumption patterns, contribute to gains in private sector investments. Gross fixed capital formation, a proxy for investment, surged by 11.04 per cent compared to 7.95 per cent in the previous quarter. While the services sector, constituting over half of India's GDP, expanded at a slower pace due to moderating global demand for financial services, the manufacturing sector's significant growth played a pivotal role in overall economic expansion. Agriculture, however, experienced a slowdown attributed to below-normal rains, resulting in a weaker summer crop harvest. India faced its weakest monsoon rains in five years, leading to government interventions such as extending curbs on the export of farm commodities like sugar, rice, and wheat. The GDP figures, representing a sharp upside surprise, received positive reactions from economists, with Upasna Bhardwaj, an economist with Kotak Mahindra Bank Ltd., noting the broader economic pickup across most non-agricultural sectors. As India experiences this robust economic growth, the challenge remains for the Reserve Bank of India (RBI), which aims to bring down inflation to its 4 per cent target on a durable basis. The strong demand poses a dilemma for the central bank, which has maintained interest rates unchanged for four policy meetings. (With inputs from Bloomberg) WATCH WION LIVE HERE

India's economic growth surpasses expectations, maintains fastest-growing major economy status

In a big boost to India's global ambitions, India's economy will soon be among the world's top three, a projection by the State Bank of India (SBI)&nbsp;research department has said.&nbsp;

According to the latest Ecowrap by India's largest public sector bank, India is become the&nbsp;third-largest economy in the world by 2027. The report added that the&nbsp;economic reforms initiated since 2014 have accelerated India's progress towards achieving this significant milestone.

In 2014, India was ranked tenth in terms of GDP.&nbsp;It now appears on track to make a remarkable leap of seven places in the next 4-5 years. Earlier, India was projected to reach this milestone by 2029.

"The path taken by India since 2014 reveals that India is likely to get the tag of the third-largest economy in 2027 (or FY28) based on actual GDP data as of March 2023," stated the economists at SBI.&nbsp;

At the current rate of growth, India is on track to surpass&nbsp;global economic powerhouses like Japan and Germany within the next five years, signifying a significant shift in the global economic landscape.

What is more intriguing is the remarkable incremental increase in India's economy between 2022 and 2027, which is projected to be more than the current size of the&nbsp;Australian&nbsp;economy.

Moreover, if India is able to hold on to this growth trajectory, it will be on its way to reach the milestone of $20 trillion by 2047. Additionally, India's global share of the GDP is set to surpass four percent by 2027, further solidifying its position on the international economic stage.

The report added that at least two states are set to break the 500 billion dollar mark by 2027–2028. Among them are Maharashtra, which houses India's financial capital, Mumbai, and Uttar Pradesh, the country's most populous state. The report referred&nbsp;to Uttar Pradesh, ruled by Yogi Adityanath, as 'the land of the midnight sun',&nbsp;indicating its potential for economic prosperity.

In a testament to India's remarkable progress, the economies of major Indian states are projected to outpace those of certain Asian and European countries, such as Vietnam and Norway, by 2027.

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In a big boost to India's global ambitions, India's economy will soon be among the world's top three, a projection by the State Bank of India (SBI) research department has said.

In a big boost to India's global ambitions, India's economy will soon be among the world's top three, a projection by the State Bank of India (SBI) research department has said. According to the latest Ecowrap by India's largest public sector bank, India is become the third-largest economy in the world by 2027. The report added that the economic reforms initiated since 2014 have accelerated India's progress towards achieving this significant milestone. In 2014, India was ranked tenth in terms of GDP. It now appears on track to make a remarkable leap of seven places in the next 4-5 years. Earlier, India was projected to reach this milestone by 2029. "The path taken by India since 2014 reveals that India is likely to get the tag of the third-largest economy in 2027 (or FY28) based on actual GDP data as of March 2023," stated the economists at SBI. At the current rate of growth, India is on track to surpass global economic powerhouses like Japan and Germany within the next five years, signifying a significant shift in the global economic landscape. What is more intriguing is the remarkable incremental increase in India's economy between 2022 and 2027, which is projected to be more than the current size of the Australian economy. Moreover, if India is able to hold on to this growth trajectory, it will be on its way to reach the milestone of $20 trillion by 2047. Additionally, India's global share of the GDP is set to surpass four percent by 2027, further solidifying its position on the international economic stage. The report added that at least two states are set to break the 500 billion dollar mark by 2027–2028. Among them are Maharashtra, which houses India's financial capital, Mumbai, and Uttar Pradesh, the country's most populous state. The report referred to Uttar Pradesh, ruled by Yogi Adityanath, as 'the land of the midnight sun', indicating its potential for economic prosperity. In a testament to India's remarkable progress, the economies of major Indian states are projected to outpace those of certain Asian and European countries, such as Vietnam and Norway, by 2027. WATCH WION LIVE HERE

India set to be the third-largest global economy by FY28: SBI Ecowrap

In a seal of approval on India's growth story, investment bank Goldman Sachs has said the country is poised to become the world's second-largest economy by 2075, surpassing the likes of Japan, Germany and the United States.

In a seal of approval on India's growth story, investment bank Goldman Sachs has said the country is poised to become the world's second-largest economy by 2075, surpassing the likes of Japan, Germany and the United States. The recent report states that favourable demographics, innovation and technology, higher capital investment and rising worker productivity will drive India's growth. Currently, India is ranked the world's fifth-largest economy, trailing Germany, Japan, China and the US. “Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” said Goldman Sachs Research’s India economist, Santanu Sengupta. “India has made more progress in innovation and technology than some may realise. Yes, the country has demographics on its side, but that’s not going to be the only driver of GDP. Innovation and increasing worker productivity are going to be important for the world’s fifth-biggest economy. In technical terms, that means greater output for each unit of labour and capital in India’s economy," said Sengupta. The report highlighted the Indian government's focus on infrastructure development in terms of roads, railways and other metrics may very well drive the growth locomotive. It argued that the time was ripe for the private sector to take the plunge and create capacity in manufacturing and services in order to generate more jobs and absorb the large labour force. WATCH | India: Leading light of the global economy, to replace China as World's growth engine × The risks associated The only concern that may stall India's growth would be if the labour force participation rate does not increase as projected, the report states. “The labour force participation rate in India has declined over the last 15 years," it noted, adding, "If you have more opportunities - especially for women because the women’s labour force participation rate is significantly lower than men’s - you can shore up your labour force participation rate, which can further increase your potential growth." Also read | Foxconn pulls out of $19.5bn semiconductor deal in India, minister says ‘won’t impact fab goals’ Net exports have also had a negative impact on India's growth but the report took an optimistic view and said the service exports had been cushioning current account balances. India has age by its side According to a Time Magazine report, nearly half the population of India (650 million people) is below the age of 25 - meaning the country won't be hitting its peak until 2065. Adults aged 65 and older comprise only seven per cent of the population compared with 14 per cent in China and 18 per cent in the US. The share of Indians who are 65 and older is likely to remain under 20 per cent until 2063 and will not approach 30 per cent until 2100, under the UN’s medium variant projections. The Goldman report is batting for this demography to come good which may propel India beyond the US, one of the biggest superpowers of the century gone by. The report, released on the same day it was announced that the Foxconn-Vedanta mega semiconductor production facility was off the table may come as a booster shot of confidence for the Indian government. (With inputs from agencies) WATCH WION LIVE HERE:

India to overtake US to become second-largest economy by 2075: Report

India's foreign exchange reserves fell significantly to a one-month low of $566.94 billion in the week ending February 10, marking its biggest weekly decline in 11 months.

The country's import cover in the week prior had dropped by $1.49 billion to $575.27 billion, stalling a three-week rising streak, according to the Reserve Bank of India's weekly data.

The latest dip in FX reserves was due to the Indian central bank selling dollars to shore up the rupee in international markets and stabilise the domestic currency from extreme volatility.

That trend of the Indian central bank intervening in forex markets to defend the rupee has been a phenomenon over the past year.

But why is this important? What does the foreign exchange of a country signify?

Foreign Exchange Reserves are of crucial importance to the functioning of any economy.

They entail all the foreign assets owned by a country's central bank. Foreign assets generate income in foreign currency.

They are stored in the form of gold or cash and are used to maintain the balance of payment and to maintain the country's financial market stability.

In October 2021, India's forex kitty hit an all-time high of $645 billion; however, the trend has reversed and declined as the Indian rupee fell significantly against the US dollar.

According to the RBI data, India's Foreign Currency Assets (FCS) have also fallen by $7.11 billion to $500.59 billion in the latest week.

The FCA differs from the reserves since it considers the effect of appreciation or depreciation of non-U.S. units such as yen, pounds, and euro.

Apart from that, India's Gold Reserves have fallen by $919 million, taking the bullion reserves to $42.86 billion. &nbsp;

The collective trend over the past year aptly showcases the drop in the rupee against the dollar.

The rupee's dramatic fall

The value of the domestic currency declined for the fourth straight week but did not weaken beyond its record low of a touch over 83 per dollar, which would have likely triggered a response by the RBI.

However, despite all the chaos, the Indian rupee has remained relatively stable compared to its Asian peers.

The RBI Governor said that the volatility in the rupee is better than seen in the past, with India's forex reserves in a comfortable position, despite the fall over the past year.

The broader sell-off of most major global currencies in favour of the dollar has hurt the forex reserves of almost every emerging market country, pushing some into a historic economic crisis.

That trend for increased interest in dollar-denominated assets intensified after Russia invaded Ukraine almost a year ago.

The Indian rupee has not been an exception.

The Indian currency fell to multiple record lows and hovered around 83 per dollar from about 74 per dollar before the war on the edge of Europe started in February last year.

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India's foreign exchange reserves fell significantly to a one-month low of $566.94 billion in the week ending February 10, marking its biggest weekly decline in 11 months.

India's foreign exchange reserves fell significantly to a one-month low of $566.94 billion in the week ending February 10, marking its biggest weekly decline in 11 months. The country's import cover in the week prior had dropped by $1.49 billion to $575.27 billion, stalling a three-week rising streak, according to the Reserve Bank of India's weekly data. The latest dip in FX reserves was due to the Indian central bank selling dollars to shore up the rupee in international markets and stabilise the domestic currency from extreme volatility. That trend of the Indian central bank intervening in forex markets to defend the rupee has been a phenomenon over the past year. But why is this important? What does the foreign exchange of a country signify? Foreign Exchange Reserves are of crucial importance to the functioning of any economy. They entail all the foreign assets owned by a country's central bank. Foreign assets generate income in foreign currency. They are stored in the form of gold or cash and are used to maintain the balance of payment and to maintain the country's financial market stability. In October 2021, India's forex kitty hit an all-time high of $645 billion; however, the trend has reversed and declined as the Indian rupee fell significantly against the US dollar. According to the RBI data, India's Foreign Currency Assets (FCS) have also fallen by $7.11 billion to $500.59 billion in the latest week. The FCA differs from the reserves since it considers the effect of appreciation or depreciation of non-U.S. units such as yen, pounds, and euro. Apart from that, India's Gold Reserves have fallen by $919 million, taking the bullion reserves to $42.86 billion. The collective trend over the past year aptly showcases the drop in the rupee against the dollar. The rupee's dramatic fall The value of the domestic currency declined for the fourth straight week but did not weaken beyond its record low of a touch over 83 per dollar, which would have likely triggered a response by the RBI. However, despite all the chaos, the Indian rupee has remained relatively stable compared to its Asian peers. The RBI Governor said that the volatility in the rupee is better than seen in the past, with India's forex reserves in a comfortable position, despite the fall over the past year. The broader sell-off of most major global currencies in favour of the dollar has hurt the forex reserves of almost every emerging market country, pushing some into a historic economic crisis. That trend for increased interest in dollar-denominated assets intensified after Russia invaded Ukraine almost a year ago. The Indian rupee has not been an exception. The Indian currency fell to multiple record lows and hovered around 83 per dollar from about 74 per dollar before the war on the edge of Europe started in February last year. WATCH WION LIVE HERE

India's forex reserves mark the biggest weekly drop in 11 months

After a near-certain contraction last year for the third time since 2019, Hong Kong’s economy is coming back stronger this year and may even grow faster than rival financial hub Singapore for the first time in more than a decade.

World Business Watch: Hong Kong's GDP growth likely to be above Singapore's

The US services industry activity has unexpectedly picked up last month. Economy continues to create jobs last month and wage growth is accelerating.

World Business Watch | US services sector activity unexpectedly accelerates in November

Moody's Investors Service on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier. It said the global slowdown and increasing domestic interest rates will set hurdles on the path of the country's economic momentum.&nbsp;

The forecast is in line with the projections made by the Asian Development Bank, Fitch Ratings and the country's own central bank, the Reserve Bank of India (RBI). The International Monetary Fund (IMF), however, had projected an even lower GDP growth of 6.8 per cent for India.

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<blockquote class="twitter-tweet">
IMF Growth Forecast: 2023 
 
USA🇺🇸: 1% 
Germany🇩🇪: -0.3% 
France🇫🇷: 0.7% 
Italy🇮🇹: -0.2% 
Spain🇪🇸: 1.2% 
Japan🇯🇵: 1.6% 
UK🇬🇧: 0.3% 
Canada🇨🇦: 1.5% 
China🇨🇳: 4.4% 
India🇮🇳: 6.1% 
Russia🇷🇺: -2.3% 
Brazil🇧🇷: 1% 
Mexico🇲🇽: 1.2% 
KSA🇸🇦: 3.7% 
Nigeria🇳🇬: 3% 
RSA🇿🇦: 1.1%<a href="https://t.co/VBrRHOfbIE">https://t.co/VBrRHOfbIE</a> <a href="https://twitter.com/hashtag/WEO?src=hash&amp;ref_src=twsrc%5Etfw">#WEO</a> <a href="https://t.co/0TDJbgSuka">pic.twitter.com/0TDJbgSuka</a>
— IMF (@IMFNews) <a href="https://twitter.com/IMFNews/status/1579820463563603974?ref_src=twsrc%5Etfw">October 11, 2022</a></blockquote>
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“For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent. The downward revision assumes higher inflation, high-interest rates and slowing global growth will dampen economic momentum by more than we had previously expected," Moody's said in its Global Macro Outlook 2023-24.

Earlier, in the month of September, the New York-based bond credit rating agency had cut projections to 7.7 per cent from 8.8 per cent in May.&nbsp;

At the end of September 2022, while presenting India's latest bi-monthly monetary policy statement, RBI Governor Shaktikanta Das emphasised extended geopolitical tensions, tightening global financial conditions and expected decline in aggregate demand, as the factors posing risks to the downward trajectory of India's growth.&nbsp;

WATCH |&nbsp;<a href="https://www.wionews.com/videos/imf-cuts-global-growth-forecast-for-2023-warns-the-worst-is-yet-to-come-524617">IMF cuts global growth forecast for 2023, warns ‘the worst is yet to come’</a>

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The IMF Chief Economist Pierre-Olivier Gourinchas, while presenting World Economic Outlook Growth Projections, had said that the world's three largest economies -- the US, China, and European Union -- will continue to stall. "The worst is yet to come and for many people, 2023 will feel like a recession," he had said.&nbsp;

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Moody's Investors Service on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier. It said the global slowdown and increasing domestic interest rates will set hurdles on the path of the country's economic momentum.

Moody's Investors Service on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier. It said the global slowdown and increasing domestic interest rates will set hurdles on the path of the country's economic momentum. The forecast is in line with the projections made by the Asian Development Bank, Fitch Ratings and the country's own central bank, the Reserve Bank of India (RBI). The International Monetary Fund (IMF), however, had projected an even lower GDP growth of 6.8 per cent for India. IMF Growth Forecast: 2023 USA🇺🇸: 1% Germany🇩🇪: -0.3% France🇫🇷: 0.7% Italy🇮🇹: -0.2% Spain🇪🇸: 1.2% Japan🇯🇵: 1.6% UK🇬🇧: 0.3% Canada🇨🇦: 1.5% China🇨🇳: 4.4% India🇮🇳: 6.1% Russia🇷🇺: -2.3% Brazil🇧🇷: 1% Mexico🇲🇽: 1.2% KSA🇸🇦: 3.7% Nigeria🇳🇬: 3% RSA🇿🇦: 1.1%https://t.co/VBrRHOfbIE #WEO pic.twitter.com/0TDJbgSuka — IMF (@IMFNews) October 11, 2022 × “For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent. The downward revision assumes higher inflation, high-interest rates and slowing global growth will dampen economic momentum by more than we had previously expected," Moody's said in its Global Macro Outlook 2023-24. Earlier, in the month of September, the New York-based bond credit rating agency had cut projections to 7.7 per cent from 8.8 per cent in May. At the end of September 2022, while presenting India's latest bi-monthly monetary policy statement, RBI Governor Shaktikanta Das emphasised extended geopolitical tensions, tightening global financial conditions and expected decline in aggregate demand, as the factors posing risks to the downward trajectory of India's growth. WATCH | IMF cuts global growth forecast for 2023, warns ‘the worst is yet to come’ × The IMF Chief Economist Pierre-Olivier Gourinchas, while presenting World Economic Outlook Growth Projections, had said that the world's three largest economies -- the US, China, and European Union -- will continue to stall. "The worst is yet to come and for many people, 2023 will feel like a recession," he had said. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Moody's lowers India's GDP growth projections for 2022 to 7 per cent

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. "Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery."

Watch |&nbsp;Recession fears and Indian-based firms | Shashank Srivastava Exclusive

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"In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession."

RBI did not give a time frame,&nbsp;however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/vice-president-election-2022-ruling-bjp-allies-pick-bengal-governor-jagdeep-dhankhar-498133" hreflang="en">Vice President election 2022: Ruling BJP, allies pick Bengal Governor Jagdeep Dhankhar</a>

"There is some evidence now that supply-chain pressures are peaking globally and in India," the bank said, adding that "a major source of upward inflation pressures may be ebbing."

"External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022," RBI said.

Also read |&nbsp;<a href="https://www.wionews.com/india/government-of-india-to-make-silicon-valley-tech-giants-pay-for-content-to-news-publishers-498052" hreflang="en">Government of India to make Silicon Valley tech giants pay for content to news publishers</a>

Reuters reports that according to figures released this week, India's annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank's tolerance range for the sixth consecutive month.

(With inputs from agencies)

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The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak.

The Reserve Bank of India (RBI) on Saturday (July 16) said that the country's economy remained resilient in the face of global headwinds. India's top bank also predicted that India is anticipated to continue on the path to becoming the world's fastest-growing economy as inflation declines from its recent peak. Reuters reports that RBI in a bulletin said that recent improvements in the southwest monsoon and fresh planting have increased confidence that rural demand will soon catch up to urban spending and consolidate a recovery. "Knock-on effects of geopolitical spill overs are visible in several sectors, tapering the pace of recovery." Watch | Recession fears and Indian-based firms | Shashank Srivastava Exclusive "In spite of this overwhelming shock, there are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession." RBI did not give a time frame, however, according to it, the worst of the recent inflation spike will be over if the commodity price slowdown seen in recent weeks persists together with the reduction of supply chain pressures. Also read | Vice President election 2022: Ruling BJP, allies pick Bengal Governor Jagdeep Dhankhar "There is some evidence now that supply-chain pressures are peaking globally and in India," the bank said, adding that "a major source of upward inflation pressures may be ebbing." "External debt remains modest as a proportion to GDP and has actually declined between March 2021 and March 2022," RBI said. Also read | Government of India to make Silicon Valley tech giants pay for content to news publishers Reuters reports that according to figures released this week, India's annual consumer inflation remained agonisingly high above the 7 per cent mark, more than the central bank's tolerance range for the sixth consecutive month. (With inputs from agencies) Watch WION LIVE HERE: You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

India is 'on course to becoming the fastest growing economy in the world': RBI

From agrarian crisis to privatisation; demonetisation to the introduction of Goods and Service Tax (GST), from stock markets touching new highs to digitisation; independent India has seen many an economic upheaval.

Was it for good? Did the decisions taken by various governments really help the Indian economy grow? Did India manage to become the golden nation its freedom fighters had dreamt of? The answer to these remains locked in history books and research papers. &nbsp;

In 1947, when India became independent, its Gross Domestic Product was just 2.7 trillion rupees, accounting for 3% of the world's total GDP. According to the latest data by National Statistical Office, "the GDP at current prices in the year 2020-21 is estimated to attain a level of Rs 195.86 lakh crore, as against Rs 203.51 lakh crore in 2019-20, showing a growth rate of -3.8%". [1 lakh crore = 1 trillion]

Here is a look at some key events that changed the shape of the Indian economy. &nbsp;

<h2>1969: Why is this year important? &nbsp;</h2>

1960s were a decade when the country was going through its worst droughts. This led the nation to depend on western countries for food and grain supplies. It was in this period that Prime Minister Indira Gandhi realised the importance of making the country self-sufficient in food grains. Hence, the Green Revolution came into being.

Apart from that, the period holds significance as, during this phase, Mrs Gandhi had nationalised 14 biggest commercial banks "with deposits of over Rs 50 crores nationalised to serve better the needs of development of the economy in conformity with national policy objectives". &nbsp;

As per the Reserve Bank of India, on February 10, 1970, the Supreme Court held the Act void mainly on the grounds that it was discriminatory against the 14 banks and that the compensation proposed to be paid by the government was not fair. Hence, a fresh Ordinance was issued on February 14 which was later replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.

<h2>1991: Liberalisation, privatisation and globalisation</h2>

The journey of the Indian economy is incomplete without this chapter. India had touched rock bottom and was in serious trouble. With the devaluation of the currency, rising fiscal deficit of the government (from 9% of GDP in 1980-81 to 10.4% in 1985-86 and 12.7% in 1990-91), India’s external debt nearly doubled from some $35 billion at the end of 1984-85 to $69 billion by the end of 1990-91.

The country's foreign exchange reserves had dried up to the point that India could barely finance three weeks worth of imports. The situation was so grim that the Indian government had to mortgage some 20 tonnes of gold for $240 million, just to keep the economy afloat.

On the political front, the Chandra Shekhar government gave way to another Congress government, as the party made a comeback after two years. Enter &nbsp;PV Narsimha Rao as prime minister and Manmohan Singh as finance minister. &nbsp;

Within weeks of assuming power, Rao and Singh announced a series of policies that changed the face of Indian economy-- liberalisation, privatisation and globalisation.

These reforms helped the country get freedom from the tough bureaucratic system and opened the doors for more opportunities and foreign financial inflows. Moreover, it led to the boom in stock markets. As per the official yearly data available from the Bombay Stock Exchange (BSE), Sensex ended at 1048.29 in 1990 and jumped to 1908.85 by 1991-end.

While India was celebrating the rise of its economy, there was someone who was benefitting from the loopholes. Enter Harshad Mehta. India's stock market history is incomplete without the story of this man. Mehta changed the whole liquidity market. India's biggest scam of around Rs 4,000 crore led to a market crash of nearly 13% in one day. &nbsp;

<h2>2007-2008: The global crisis: How India reacted</h2>

It was an epic financial and economic collapse that had cost many people their jobs, homes, and savings. The “Great Recession” had brought the whole of Wall Street to its knees. The period marked the largest bankruptcy in U.S. history-- the collapse of Lehman Brothers. While the other countries were facing the worst, how was India reacting to the global pressure? Economic growth in India during FY2008-09 stood at 6.7%. Reportedly, India was less impacted because the exports accounted for just 15% of the GDP.

But, what came in as a surprise was the stimulus package announced by the Manmohan Singh administration. In December 2008, the government decided to seek approval for an additional plan expenditure of Rs 200 billion. "The government also infused about Rs 3 trillion into the system for public spending through a range of measures such as lowering tax and reduction of key rates by the Reserve Bank of India", stated an Economic Times report.

Moreover, this package did not go well for the government. "My government was punished in the 2014 elections after we spent more money in 2009 as part of a stimulus package. Due to this, we had to violate fiscal consolidation norms. The inflation went up to 14% and the rupee lost its value. Finally, people rejected our government", P Chidambaram, the finance minister at the time, was quoted as saying.

Apart from the economy, the Sensex tumbled from more than 20,000 points in Dec 2007 to a little over 9,000 (lowest) in mid-early 2009, before bouncing back to 17,000 in the same year.

<h2>2016: Demonitisation</h2>

After eight years, the word "demonetisation" was introduced in the annals of India’s economic history. Prime Minister Narendra Modi on November 8 of that year declared that Rs 500 and Rs 1,000 notes would not be legal tender. The announcement shook the country, almost everyone from a small vendor to a high-profile businessman was affected. Sensex crashed nearly 1,689 points and Nifty plunged by over 541 points due to the government’s move to withdraw notes of higher denominations.

Just months after demonetisation, the Rajya Sabha (Upper House) passed a crucial bill on Goods and Services Tax (GST). However, at that time, the markets didn't react much and remained mostly flat on the upper side.

<h2>2020: Virus hits the economy</h2>

But, after nearly three years, the country witnessed another jolt: the coronavirus pandemic. According to a report by Azim Premji University, the first wave of COVID-19 pandemic pushed 23 crore people below the poverty line (below the national minimum wage threshold of Rs. 375 per day as recommended by the Anoop Satpathy Committee). The report said there has been a rise of 15% in poverty in rural India and a rise of 20% in urban India during the last one pandemic year.

However, after the second wave, it is still unclear how deep the impact of the pandemic would be on the country's economy. Despite that, the Sensex touched an all-time high of 55,000 and Nifty at 16,529, giving hopes for better and improved days ahead. &nbsp;

From agrarian crisis to privatisation; demonetisation to the introduction of Goods and Service Tax (GST), from stock markets touching new highs to digitisation; independent India has seen many an economic upheaval.

From agrarian crisis to privatisation; demonetisation to the introduction of Goods and Service Tax (GST), from stock markets touching new highs to digitisation; independent India has seen many an economic upheaval. Was it for good? Did the decisions taken by various governments really help the Indian economy grow? Did India manage to become the golden nation its freedom fighters had dreamt of? The answer to these remains locked in history books and research papers. In 1947, when India became independent, its Gross Domestic Product was just 2.7 trillion rupees, accounting for 3% of the world's total GDP. According to the latest data by National Statistical Office, "the GDP at current prices in the year 2020-21 is estimated to attain a level of Rs 195.86 lakh crore, as against Rs 203.51 lakh crore in 2019-20, showing a growth rate of -3.8%". [1 lakh crore = 1 trillion] Here is a look at some key events that changed the shape of the Indian economy. 1969: Why is this year important? 1960s were a decade when the country was going through its worst droughts. This led the nation to depend on western countries for food and grain supplies. It was in this period that Prime Minister Indira Gandhi realised the importance of making the country self-sufficient in food grains. Hence, the Green Revolution came into being. Apart from that, the period holds significance as, during this phase, Mrs Gandhi had nationalised 14 biggest commercial banks "with deposits of over Rs 50 crores nationalised to serve better the needs of development of the economy in conformity with national policy objectives". As per the Reserve Bank of India, on February 10, 1970, the Supreme Court held the Act void mainly on the grounds that it was discriminatory against the 14 banks and that the compensation proposed to be paid by the government was not fair. Hence, a fresh Ordinance was issued on February 14 which was later replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. 1991: Liberalisation, privatisation and globalisation The journey of the Indian economy is incomplete without this chapter. India had touched rock bottom and was in serious trouble. With the devaluation of the currency, rising fiscal deficit of the government (from 9% of GDP in 1980-81 to 10.4% in 1985-86 and 12.7% in 1990-91), India’s external debt nearly doubled from some $35 billion at the end of 1984-85 to $69 billion by the end of 1990-91. The country's foreign exchange reserves had dried up to the point that India could barely finance three weeks worth of imports. The situation was so grim that the Indian government had to mortgage some 20 tonnes of gold for $240 million, just to keep the economy afloat. On the political front, the Chandra Shekhar government gave way to another Congress government, as the party made a comeback after two years. Enter PV Narsimha Rao as prime minister and Manmohan Singh as finance minister. Within weeks of assuming power, Rao and Singh announced a series of policies that changed the face of Indian economy-- liberalisation, privatisation and globalisation. These reforms helped the country get freedom from the tough bureaucratic system and opened the doors for more opportunities and foreign financial inflows. Moreover, it led to the boom in stock markets. As per the official yearly data available from the Bombay Stock Exchange (BSE), Sensex ended at 1048.29 in 1990 and jumped to 1908.85 by 1991-end. While India was celebrating the rise of its economy, there was someone who was benefitting from the loopholes. Enter Harshad Mehta. India's stock market history is incomplete without the story of this man. Mehta changed the whole liquidity market. India's biggest scam of around Rs 4,000 crore led to a market crash of nearly 13% in one day. 2007-2008: The global crisis: How India reacted It was an epic financial and economic collapse that had cost many people their jobs, homes, and savings. The “Great Recession” had brought the whole of Wall Street to its knees. The period marked the largest bankruptcy in U.S. history-- the collapse of Lehman Brothers. While the other countries were facing the worst, how was India reacting to the global pressure? Economic growth in India during FY2008-09 stood at 6.7%. Reportedly, India was less impacted because the exports accounted for just 15% of the GDP. But, what came in as a surprise was the stimulus package announced by the Manmohan Singh administration. In December 2008, the government decided to seek approval for an additional plan expenditure of Rs 200 billion. "The government also infused about Rs 3 trillion into the system for public spending through a range of measures such as lowering tax and reduction of key rates by the Reserve Bank of India", stated an Economic Times report. Moreover, this package did not go well for the government. "My government was punished in the 2014 elections after we spent more money in 2009 as part of a stimulus package. Due to this, we had to violate fiscal consolidation norms. The inflation went up to 14% and the rupee lost its value. Finally, people rejected our government", P Chidambaram, the finance minister at the time, was quoted as saying. Apart from the economy, the Sensex tumbled from more than 20,000 points in Dec 2007 to a little over 9,000 (lowest) in mid-early 2009, before bouncing back to 17,000 in the same year. 2016: Demonitisation After eight years, the word "demonetisation" was introduced in the annals of India’s economic history. Prime Minister Narendra Modi on November 8 of that year declared that Rs 500 and Rs 1,000 notes would not be legal tender. The announcement shook the country, almost everyone from a small vendor to a high-profile businessman was affected. Sensex crashed nearly 1,689 points and Nifty plunged by over 541 points due to the government’s move to withdraw notes of higher denominations. Just months after demonetisation, the Rajya Sabha (Upper House) passed a crucial bill on Goods and Services Tax (GST). However, at that time, the markets didn't react much and remained mostly flat on the upper side. 2020: Virus hits the economy But, after nearly three years, the country witnessed another jolt: the coronavirus pandemic. According to a report by Azim Premji University, the first wave of COVID-19 pandemic pushed 23 crore people below the poverty line (below the national minimum wage threshold of Rs. 375 per day as recommended by the Anoop Satpathy Committee). The report said there has been a rise of 15% in poverty in rural India and a rise of 20% in urban India during the last one pandemic year. However, after the second wave, it is still unclear how deep the impact of the pandemic would be on the country's economy. Despite that, the Sensex touched an all-time high of 55,000 and Nifty at 16,529, giving hopes for better and improved days ahead.

Independence Day: Events that transformed India’s economy

Fitch has revised India's GDP growth forecast to 12 .8 % for the fiscal year beginning April 1st from its previous estimate of 11%.

World Business Watch: Fitch raises India's FY22 GDP growth projection to 12.8%

Growth in India’s dominant service sector accelerated at a pace not seen in over seven years last month, boosted by a recovery in foreign demand and solid business confidence, a private survey showed on Wednesday.

Also read: <a href="https://www.wionews.com/india-news/india-services-activity-returns-to-growth-in-sept-on-stronger-demand-pmi-21028">India services activity returned to growth in September: Study</a>

The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 57.5 in February from January’s 55.5. It was the highest reading since January 2013 and comfortably above the 50-mark separating growth from contraction for a fourth month.

“Behind the resilience in the trend for business activity stands healthy demand for services from both the domestic and international markets,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.

Also read:<a href="https://www.wionews.com/business-economy/indias-overall-export-shows-151-growth-during-april-october-262444"> India's overall export shows 1.51% growth during April-October</a>

“Positive gains in new work across the manufacturing and service sectors suggest that private-sector output will likely increase markedly again in March, boding well for final quarter GDP following expectations of a flat growth rate in Q3 FY 2019/20.”

The pace of expansion in a sub-index tracking new business slowed slightly from January’s seven-year high but remained above the long-term average since the index was first published in December 2005.

Also read:<a href="https://www.wionews.com/south-asia/indian-services-activity-plunges-into-contraction-in-november-on-cash-crackdown-9749"> Indian services activity plunges into contraction in November on cash crackdown</a>

New export business - a proxy of foreign demand - returned to expansion territory last month after contracting for the first time in 11 months in January. However, firms failed to significantly increase the pace of hiring.

“Service providers experienced a marked improvement in workforce productivity, with the sharp rise in business activity happening despite a softer and only modest increase in employment,” De Lima said.

A sister survey on Monday showed factory activity growth slowed in February from January’s eight-year high due to a modest weakening in demand and output.

&nbsp;

However, the composite PMI, which includes both manufacturing and services, rose to 57.6 in February from January’s 56.3, its highest in eight years.

Service providers remained optimistic about growth in the year ahead and the expectations index strengthened to a six month high.

On the price front, growth in both input cost and prices charged weakened only modestly in February, suggesting retail inflation is unlikely to slow significantly anytime soon.

Growth in India’s dominant service sector accelerated at a pace not seen in over seven years last month, boosted by a recovery in foreign demand and solid business confidence, a private survey showed on Wednesday.

Growth in India’s dominant service sector accelerated at a pace not seen in over seven years last month, boosted by a recovery in foreign demand and solid business confidence, a private survey showed on Wednesday. Also read: India services activity returned to growth in September: Study The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 57.5 in February from January’s 55.5. It was the highest reading since January 2013 and comfortably above the 50-mark separating growth from contraction for a fourth month. “Behind the resilience in the trend for business activity stands healthy demand for services from both the domestic and international markets,” Pollyanna De Lima, principal economist at IHS Markit, said in a release. Also read: India's overall export shows 1.51% growth during April-October “Positive gains in new work across the manufacturing and service sectors suggest that private-sector output will likely increase markedly again in March, boding well for final quarter GDP following expectations of a flat growth rate in Q3 FY 2019/20.” The pace of expansion in a sub-index tracking new business slowed slightly from January’s seven-year high but remained above the long-term average since the index was first published in December 2005. Also read: Indian services activity plunges into contraction in November on cash crackdown New export business - a proxy of foreign demand - returned to expansion territory last month after contracting for the first time in 11 months in January. However, firms failed to significantly increase the pace of hiring. “Service providers experienced a marked improvement in workforce productivity, with the sharp rise in business activity happening despite a softer and only modest increase in employment,” De Lima said. A sister survey on Monday showed factory activity growth slowed in February from January’s eight-year high due to a modest weakening in demand and output. However, the composite PMI, which includes both manufacturing and services, rose to 57.6 in February from January’s 56.3, its highest in eight years. Service providers remained optimistic about growth in the year ahead and the expectations index strengthened to a six month high. On the price front, growth in both input cost and prices charged weakened only modestly in February, suggesting retail inflation is unlikely to slow significantly anytime soon.

India services growth at over seven-year high on strong export demand

India plans to take more steps to boost consumer demand including injecting liquidity through banks and simplifying personal taxes, a top government economic adviser said on Friday, in a bid to raise economic growth from six-year lows.

Krishnamurthy Subramanian, Chief Economic Adviser at the Finance Ministry, said the government had slashed corporate taxes to attract investment and was looking for ways to boost consumer demand to support that investment.

"In the short-run, we are taking steps to increase consumption so that anticipating that consumption, investment also goes up," he told Reuters in an interview.

One of the measures on the table is aimed at easing personal taxation and making the whole tax administration simpler. The government is also considering the report of a task force to bring India's six-decades-old tax legislation more into line with those of other countries.

Subramanian said the government planned to make public the recommendations of the task force.

"The direct tax code task force has submitted its report," he said, adding that the steps that have already been taken to streamline the tax administration are likely to help in improving the tax buoyancy.

Last month Finance Minister Nirmala Sitharaman <a href="https://www.wionews.com/opinions/corporate-tax-cut-may-act-as-a-steroid-for-the-economy-254318">cut corporate tax </a>rates from over 30 per cent&nbsp;to 25 per cent, and to 15 per cent&nbsp;for new manufacturing companies, putting it on a par or even ahead of some of its Asian peers.

That landmark move has raised hopes that the government might consider similar cuts to personal taxes to put more money into the hands of consumers and especially the middle class who form the core of Prime Minister Narendra Modi's ruling group.

A source in the finance ministry said the task force's recommendations - which include cuts in the income tax rate by up to 10 per cent&nbsp;- could be announced even before the presentation in February of the annual budget for fiscal 2020/21, which starts in April.

"Timing of the implementation is a political call," said the source, adding that officials have already held discussions on the issue.

Growth in April-June slipped to 5 per cent, its slowest pace since 2013. The International Monetary Fund has cut its growth forecast to 6.1 per cent&nbsp;for this fiscal year from an initial 7 per cent, citing a slowdown in domestic and global demand.

New Delhi has also been trying to boost domestic growth through an infrastructure package and a new loan program organised with the banking sector that has doled out loans worth over 800 billion rupees.

Subramanian said the government has asked the banks to buy out assets from the crisis-hit non-banking finance companies to improve liquidity in the market.

"The government will do all that it takes to take back the growth on the high trajectory."

Referring to banking reforms, he said, the government was focussed on the merger of some state banks, aiming to cut down the number of state banks to 12 from 27 in 2017, and has asked them to take corporate default cases to bankruptcy courts only above a threshold limit.

India plans to take more steps to boost consumer demand including injecting liquidity through banks and simplifying personal taxes, a top government economic adviser said on Friday, in a bid to raise economic growth from six-year lows.

India plans to take more steps to boost consumer demand including injecting liquidity through banks and simplifying personal taxes, a top government economic adviser said on Friday, in a bid to raise economic growth from six-year lows. Krishnamurthy Subramanian, Chief Economic Adviser at the Finance Ministry, said the government had slashed corporate taxes to attract investment and was looking for ways to boost consumer demand to support that investment. "In the short-run, we are taking steps to increase consumption so that anticipating that consumption, investment also goes up," he told Reuters in an interview. One of the measures on the table is aimed at easing personal taxation and making the whole tax administration simpler. The government is also considering the report of a task force to bring India's six-decades-old tax legislation more into line with those of other countries. Subramanian said the government planned to make public the recommendations of the task force. "The direct tax code task force has submitted its report," he said, adding that the steps that have already been taken to streamline the tax administration are likely to help in improving the tax buoyancy. Last month Finance Minister Nirmala Sitharaman cut corporate tax rates from over 30 per cent to 25 per cent, and to 15 per cent for new manufacturing companies, putting it on a par or even ahead of some of its Asian peers. That landmark move has raised hopes that the government might consider similar cuts to personal taxes to put more money into the hands of consumers and especially the middle class who form the core of Prime Minister Narendra Modi's ruling group. A source in the finance ministry said the task force's recommendations - which include cuts in the income tax rate by up to 10 per cent - could be announced even before the presentation in February of the annual budget for fiscal 2020/21, which starts in April. "Timing of the implementation is a political call," said the source, adding that officials have already held discussions on the issue. Growth in April-June slipped to 5 per cent, its slowest pace since 2013. The International Monetary Fund has cut its growth forecast to 6.1 per cent for this fiscal year from an initial 7 per cent, citing a slowdown in domestic and global demand. New Delhi has also been trying to boost domestic growth through an infrastructure package and a new loan program organised with the banking sector that has doled out loans worth over 800 billion rupees. Subramanian said the government has asked the banks to buy out assets from the crisis-hit non-banking finance companies to improve liquidity in the market. "The government will do all that it takes to take back the growth on the high trajectory." Referring to banking reforms, he said, the government was focussed on the merger of some state banks, aiming to cut down the number of state banks to 12 from 27 in 2017, and has asked them to take corporate default cases to bankruptcy courts only above a threshold limit.

India to take more steps to boost consumer demand, growth: Chief Economic Adviser

India&#39;s growth slumped to 5.7 per cent in the first quarter of the financial year - weighed down by slow growth in construction following demonetisation&nbsp;- official data showed.

Two&nbsp;large economic reforms undertaken by Prime Minister Narendra Modi&#39;s BJP government &nbsp;-- the goods and services tax (GST), and the demonetisation of high value currency are perceived to be the reason for the slowdown.

The combination of higher discounts preceding the roll-out of GST&nbsp;and an increase in wholesale price inflation pulled down growth, Reuters quoted an analyst as saying.

&quot;The lingering impact of demonetisation is visible in the low growth of construction. The&nbsp;GDP&nbsp;and GVA (growth value added) estimates have undershot our and market expectations by a considerable degree.&nbsp;

&quot;The combination of lower volumes and higher discounts pre-GST (goods and services tax) and positive WPI (wholesale price inflation) weighed upon the manufacturing sector in Q1,&quot;&nbsp;Aditi Nayar, an economist with credit rating agency ICRA, told Reuters.

The figures released by the Central Statistics Office were lower than the 6.1 per cent recorded in the previous quarter, and less than forecast by many economists in one of the world&#39;s fastest growing economies.

India&#39;s economic growth still lags far behind that of regional rival China, which grew at 6.9 per cent over the same period.

Last year, India&#39;s economy grew at 7.1 per cent for the first quarter.

In February, the government had forecast GDP growth of between 6.75 per cent and 7.5 per cent for 2017/18.

However, in a survey released August, the government warned several factors including the introduction of the GST and appreciation of the Indian currency, could drag on growth.

 
&nbsp;

The figure was lower than the 6.1 per cent recorded in the previous quarter, and less than forecast by many economists

India's growth slumped to 5.7 per cent in the first quarter of the financial year - weighed down by slow growth in construction following demonetisation - official data showed. Two large economic reforms undertaken by Prime Minister Narendra Modi's BJP government -- the goods and services tax (GST), and the demonetisation of high value currency are perceived to be the reason for the slowdown. The combination of higher discounts preceding the roll-out of GST and an increase in wholesale price inflation pulled down growth, Reuters quoted an analyst as saying. "The lingering impact of demonetisation is visible in the low growth of construction. The GDP and GVA (growth value added) estimates have undershot our and market expectations by a considerable degree. "The combination of lower volumes and higher discounts pre-GST (goods and services tax) and positive WPI (wholesale price inflation) weighed upon the manufacturing sector in Q1," Aditi Nayar, an economist with credit rating agency ICRA, told Reuters. The figures released by the Central Statistics Office were lower than the 6.1 per cent recorded in the previous quarter, and less than forecast by many economists in one of the world's fastest growing economies. India's economic growth still lags far behind that of regional rival China, which grew at 6.9 per cent over the same period. Last year, India's economy grew at 7.1 per cent for the first quarter. In February, the government had forecast GDP growth of between 6.75 per cent and 7.5 per cent for 2017/18. However, in a survey released August, the government warned several factors including the introduction of the GST and appreciation of the Indian currency, could drag on growth.

India first quarter economic growth slips to 5.7%