Key indicators show Indian economy remaining on course, says NCAER Monthly Review

The latest data point to the growth dynamism of the domestic economy with the Purchasing Managers’ Index (PMI) for both manufacturing and services increasing in June (composite PMI at 60.9) and total outstanding credit of scheduled commercial banks expanding by nearly 21 per cent on a year-on-year basis.

Personal loans and credit for agriculture and allied activities expanded by nearly 29 percent and over 22 percent respectively.

India’s foreign exchange reserves reached an all-time high at $666.9 billion on July 12, giving cushion for over 11 months of projected imports.

NCAER Director General Dr Poonam Gupta said Union Budget 2024-25 lived to the expectations on unwavering commitment to fiscal consolidation, prudence, and quality.

The Budget has kept fiscal deficit target at 4.9 percent of GDP and capital expenditure at 2.4 percent of GDP during 2024-25. Dr Gupta said,” There is much to commend in the way the Union Budgets have been prepared in the last few years. There has been much transparency in the numbers; budget estimates have been realistic; there has been overall fiscal restraint -before, during and after Covid; quality of expenditure has remarkably improved; and there have been no electoral cycles.”

Meanwhile the Economic Survey has projected economic growth during the year to be between 6.5-7 growth.

“Based on the momentum in the high frequency indicators; normalized monsoon; a relatively benign global outlook; and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 percent, and possibly closer to 7.5 percent,” the NCAER DG said.