Finance Ministry says Indian economy to grow 7% in FY24

New Delhi: The Finance Ministry said on Monday that it now appears very likely that the Indian economy will achieve a growth rate at or above 7 per cent for FY24, while some predict it will achieve another year of 7 per cent real growth in FY25 as well.

If the prognosis for FY25 turns out to be right, it will mark the fourth year post-pandemic that the Indian economy will have grown at or over 7 per cent. That would be an impressive achievement, testifying to the resilience and potential of the Indian economy, the Finance Ministry said.

"Some economists argue, with considerable merit, that not all growth is equal. They are right. It is one thing for India to grow at 8-9 per cent when the world economy is growing at 4 per cent, but it is another thing to grow at or above 7 per cent when the world economy is struggling to grow at 2 per cent.

"One unit of growth in the latter circumstance is qualitatively superior to the former," the Finance Ministry said in a review of the Indian economy just days before the Interim Budget (Feb 1).

The marginal utility of growth in the second scenario is much higher. The global economy is struggling to maintain its recovery post-Covid because successive shocks have buffeted it.

Some of them, such as supply chain disruptions, have returned in 2024. If they persist, they will impact trade flows, transportation costs, economic output and inflation worldwide.

India will not be exempt from it, but having faced and seen off Covid and the energy and commodity price shocks of 2022, India is quietly confident of weathering the emerging disturbances, the review said.

This is not the Economic Survey prepared by the Department of Economic Affairs. That will come before the full Budget after the general elections.