The achievements made by India in the economic sector in 2023 will be remembered for a long time

There are strong possibilities that India’s economic growth rate will be around 7 percent in the financial year 2023-24. The economic growth rate in the first quarter of this year, April-June 2023, has been 7.8 percent, while in the second quarter, July-September 2023, it has been 7.6 percent. Similarly, due to the business of about Rs 4 lakh crore on Diwali festival and the growth rate in the manufacturing sector being above 12 percent in the month of October 2023, the economic growth in the third quarter of this year, October-December 2023, will also be 7 percent. Can stay. Due to this, there are strong possibilities of the economic growth rate remaining at 7 percent in the entire financial year 2023-24. Whereas, the possibility of recession is being expressed in many other developed countries of the world. Thus, India will continue to be the fastest growing economy in the world even in the year 2023.

Due to the continuous pace of India’s economic development, the amount of foreign investment in India is also continuously increasing. With this, India’s foreign exchange reserves have crossed the level of US $ 62,000 crore. The country’s foreign exchange reserves stood at US $ 60,700 crore in the week ending December 8, 2023, which increased to US $ 61,600 crore in the week ending December 15, 2023 and reached US $ 62,000 crore in the week ending December 22, 2023. level has been exceeded. Thus, the trend of increase in India’s foreign exchange reserves continues. However, India’s foreign exchange reserves had reached its highest level of US$ 64,500 crore in October 2021, now there is a strong possibility of crossing this highest level soon. During the Corona epidemic, the Indian Rupee came under extreme pressure. To protect the Rupee from devaluation in the international market and to keep the value of the Indian Rupee stable, the Reserve Bank of India sold US dollars in large quantities in the market. Foreign exchange reserves had reduced. Foreign exchange reserves provide economic security to any country when needed. The increase in foreign exchange reserves helps the Central Government and the Reserve Bank of India to deal with any external and internal financial or economic crisis arising due to decline in the economic growth of the country. This provides a comfortable situation to the country in times of crisis on the economic front.

According to information released by the World Bank, in the year 2023, non-resident Indians have remitted a record amount of US $ 12,500 crore to India. This amount sent by non-resident Indians to India is the highest amount sent to any country in the entire world. This shows India’s internal strength in the economic field. The confidence of foreign investors as well as non-resident Indians in the Indian economy is continuously increasing. A large number of NRIs reside in America, Britain, Singapore and Gulf countries and India has received 54 percent of remittances from these 4 countries alone. In the year 2022, an amount of US $ 11,110 crore was remitted to India by NRIs.

India today has developed into an attractive center for investors from all over the world. Especially the initiatives being taken by the Central Government and some states seem to be attracting foreign capital to India. India today appears as a sweet spot among emerging economies for foreign direct investment. The production linked production incentive scheme for 14 key sectors like electronics, automobile and pharma has increased the interest of foreign investors in India. Also, regulatory reforms in areas such as labour, taxation and business permits over the past few years have increased the ease of doing business. Well-developed infrastructure and availability of skilled labor give the country an edge over other countries for investment, which helps in the decision making process of foreign investors.

Recently, a compliance report released by the Reserve Bank of India states that in the second quarter of the financial year 2023-24, July-September 2023, India’s current account deficit will reduce by an amount of US $ 830 crore to the GDP. One percent is left. It was 3.8 percent of the GDP in the second quarter of the financial year 2022-23, July-September 2022, amounting to US $ 3000 crore. An incomparable improvement has been seen in India’s foreign trade. The current account deficit measures the difference between the value of a country’s imports and exports of goods and services, as well as financial transfers. Reduction in current account deficit is considered a good situation for any country because it shows the situation of strengthening exports and decreasing imports.

In the year 2023, the level of non-performing assets in Indian banks, especially public sector banks, has come to almost the lowest level and the capital adequacy ratio has come to almost the highest level. In many banks this level is even higher than the capital adequacy ratio of American banks. Till a few years ago, to maintain the capital adequacy ratio in public sector banks at international standards, the central government had to infuse capital into these banks, but today the public sector banks are paying huge amount of dividend to the central government. Are. It seems like a turnaround is visible in the banking sector.

According to another report released by the Reserve Bank of India, the budgetary position and fiscal health of various states of India is continuously showing strength. Various states have continued the reforms undertaken in the financial years 2021-22 and 2022-23, due to which the combined fiscal deficit of the states has reduced while remaining under control. The fiscal deficit of the Central Government and various states came under immense pressure following the Covid pandemic but the situation has since steadily improved. There has been a substantial increase in tax collection mainly by improving the compliance of tax collection and expenditure has also been controlled by some states, although capital expenditure has not been allowed to be affected, due to which the situation of fiscal deficit has improved. It is becoming visible.

In its above report, the Reserve Bank of India has analyzed the budget, fiscal indicators and expenditure patterns of various states for the financial year 2023-24. Key points on which improvements have been reported include continued improvement in the collection of Goods and Services Tax, decline in revenue deficit, steady increase in capital expenditure and reduction in outstanding debt levels. In this report, the Reserve Bank of India has estimated that the overall budgetary position of the states will be positive due to strong economic growth and fiscal reforms at the state level in the coming times. This situation can be considered as a relief for India. Due to reduced revenue deficit of the states, the combined fiscal deficit of the states has remained limited to 2.8 percent of the GDP against the target for the second consecutive year. Capital expenditure has registered an attractive growth of 52.6 per cent in H1FY23, led by the Central Scheme for Capital Investment Support. Revenue expenditure growth has declined and the quality of expenditure has improved. Outstanding liabilities as a proportion of GDP are projected to decline from 31 per cent in FY2011 to 27.6 per cent in FY2024.

-Prahlad Sabnani

Retired Deputy General Manager

state Bank of India

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