Union Finance Minister Nirmala Sitharaman carrying the Budget pill on the Ministry of Finance leaving for the Parliament to current the nation’s interim Budget 2024, in New Delhi.
| Photo Credit: ANI
The outlook for a “reasonably low headline inflation rate is good”, the Finance Ministry mentioned on Tuesday, citing the steady downward motion in core inflation and moderation in meals costs together with larger foodgrain buffer shares and wholesome Rabi harvest prospects.
Terming robust personal consumption because the “bedrock of high growth”, the ministry’s month-to-month financial evaluation for January mentioned India’s personal consumption tendencies now replicate “buoyant consumer sentiment that is generally associated with reduced economic uncertainty”.
“A strong Private Final Consumption Expenditure (PFCE) driven by sustained growth in urban demand and recovery in rural demand is supporting India’s growth in 2023-24,” it mentioned.
Referring to the central financial institution’s projection of seven% actual GDP progress in 2024-25, the ministry mentioned that family consumption is predicted to enhance, whereas capital formation prospects are shiny owing to an upturn within the personal capex cycle, improved enterprise sentiments, wholesome steadiness sheets of banks and corporates, and the Centre’s continued capital expenditure thrust.
Although merchandise exports have declined about 5% thus far this 12 months, the ministry famous an enchancment within the international commerce outlook and mentioned rising integration within the international provide chain will help internet exterior demand. “However, headwinds from geopolitical tensions, such as supply chain disruptions and higher logistics costs, volatility in international financial markets, and geoeconomic fragmentation, pose downside risks,” it mentioned.
Those dangers, the ministry mentioned, embrace a spike in new commodity costs from geopolitical shocks, together with continued assaults within the Red Sea and provide disruptions or extra persistent underlying inflation within the developed world, which may lengthen tight financial circumstances and damage export prospects.
With Rabi sowing barely larger than final 12 months, the ministry asserted that top reservoir ranges, ample availability of fertilisers and seeds, and rising tractor gross sales help enhancements in sowing acreage and output outturns. That complete foodgrain shares stand at 3.2 occasions the buffer norm requirement for the January-March interval would help in “curbing inflationary pressures caused by uneven rainfall distribution in the country, besides strengthening food security”, the evaluation said.
