Investments to fuel India amid sluggish global growth: Govt
ums, and longer transit times could make imported goods significantly more expensive,” it added.
The finance ministry said strengthening private consumption demand is evident from indicators such as burgeoning air passenger traffic and sale of passenger vehicles, digital payments, and improved consumer confidence. Meanwhile, the upscaling of enterprises and the emergence of sunrise sectors as catalysts for generating quality employment will mark the ascent of the manufacturing sector, it added.
“Increased demand for residential properties in tier-II and tier-III cities augurs well for furthering construction activity,” the review said. “Non-farm employment has revived, improving the capacity to absorb the labour leaving agriculture.”
The finance ministry also said core inflation is trending downwards, indicating a broad-based moderation in price pressures. “The pick-up in summer sowing is likely to help reduce food prices,” the finance ministry's latest monthly economic review said.
“On the external front, the narrowing merchandise trade deficit and the rising net services receipts are expected to result in an improvement in the current account balance in FY24,” it added. The economic review warned that India’s current account deficit will need to be closely monitored, while an increase in domestic household savings will be necessary to finance private sector capital formation in the economy.
“Bond investors will base their investment decisions based on their perception of its persistence. On the whole, India looks positively towa-rds the dawn of FY25,” it added.
Recently, Bloomberg Index Services said it would include a set of Indian government bonds to its widely-tracked emerging market index from January 2025. “The announcement ...should bolster inflows, buoyed by the fiscal prudence that the government has demonstrated over the years,” the economic review added.
The finance ministry said core inflation was falling, indicating a broad-based moderation in price pressures