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Message From Director General

Chandrajit Banerjee, Director General, CII

B y achieving an impressive GDP 2024-25, down from 5.6 per cent in the enhance agricultural productivity and
growth of 8.2 per cent in 2023-24,
previous year, combined with a sustained
uplift rural livelihoods. Simultaneously, the
India has affirmed its status as the emphasis on capital expenditure, reflects a government has introduced a range of
fastest-growing major economy globally balanced approach to fostering growth initiatives to support MSMEs and
for the third consecutive year. India’s that has been crucial in establishing a promote labor-intensive manufacturing.
growth story is particularly striking given strong foundation for long-term growth. Enhanced credit guarantees, increased
the sluggish global economy, characterized limits for MUDRA loans, and the
by subdued growth and persistent However, this optimistic outlook is establishment of E-Commerce Export
inflationary pressures. The economy’s tempered by certain risks. Persistent food Hubs are among the measures aimed at
ability to sustain high growth rates while inflation has driven headline inflation up invigorating MSMEs, fostering
managing inflation highlights its to 5.1 per cent in June 2024, an increase entrepreneurship and driving job creation.
macroeconomic strength and resilience. from 4.8 per cent in the previous two
months. Additionally, recent turbulence in Further, a strong emphasis on skills
A critical element of India’s resilience lies global financial markets, marked by development and workforce
in its ability to navigate external shocks recession fears in major economies and empowerment, including provisions for
while maintaining economic stability. The escalating geopolitical tensions in the internship opportunities, education loan
nation’s foreign exchange reserves, which Middle East, presents potential challenges subsidies, and employment-linked
reached a record US$652 billion in June to India's growth trajectory. Despite these schemes, reflect a strategic focus on
2024, serve as a testament to its robust risks, India's strong domestic economy bridging the skills gap and enhancing
economic health. Further, India’s strong and substantial buffers provide a solid employability. These measures are
performance in services exports and foundation to weather global expected to generate job opportunities
remittance receipts have been uncertainties and sustain its growth and strengthen India’s position as a global
instrumental in moderating the current momentum. manufacturing hub.
account deficit, which has decreased to
0.7 per cent of GDP in 2023-24 from 2.0 The Union Budget presented by the new Government has also made significant
per cent in the previous year. Strong FDI government provides a strong impetus to strides in committing to environmental
inflows along with the economy’s set in motion a virtuous cycle of sustainability while balancing development
attractiveness as a leading destination for investment and employment while goals. Measures like developing climate
greenfield investment in the Asia-Pacific ensuring macroeconomic stability and finance taxonomy and setting targets for
region provide a substantial buffer against enabling inclusive growth. By outlining reducing emissions in hard-to-abate
global fluctuations. nine key priorities, the budget presents a sectors will be instrumental in India’s
comprehensive framework for transition to a net-zero economy.
The steady progress of south-west transforming India into an inclusive,
monsoon, coupled with increased kharif sustainable, and globally competitive The Budget sets out a clear strategy for
sowing and improved water reservoir economy, aligning with the broader vision inclusive and sustainable development.
levels, signals a promising boost in of becoming Viksit Bharat by 2047.
agricultural production and thus, a revival
in rural demand. There are also visible Government’s emphasis on agriculture
signs of pickup in private investment and rural development, reflected in
bolstered by expansion in bank credit. increasing allocations for rural
Further, the government’s commitment to infrastructure, supporting
fiscal discipline, evident from the targeted farmer-producer organizations and
fiscal deficit of 4.9 per cent of GDP for advancing natural farming practices, will Chandrajit Banerjee
Director General, CII

ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 05
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024