Pivots, pillars and pace

In calendar 2023, the Indian economy weathered many a storm - both global and domestic - and emerged relatively strong.

The year 2024 will also pose significant challenges.

For one, global growth could finally be slowing. Then interest rates could take a turn but may remain elevated because of persisting inflation worries. Lastly, geopolitical tensions because of strife in two geographies are expected to simmer for a while.

For the Indian economy, this could translate to a moderate deceleration in fiscal 2025. But beyond that, the medium term, or between fiscals 2025 and 2031, domestic prospects look positive.

Not only is India expected to continue as the fastest-growing large economy, but also catapult itself to the 'upper middle-income' league after this decade ends.

The government is expected to sharpen focus on fiscal consolidation sooner than later, so the role of the private sector will be pivotal to the momentum in investments.

What is helpful here is rising capacity utilisation across major sectors. New investments under the Production-Linked Incentive scheme are also supporting capacity expansion in select sectors and improving domestic supply-chain integration.

The pillars to drive long-term growth are falling in place.

Capital - supported by stronger bank and corporate balance sheets - will continue to play a lead role and there is little worry on its availability at present.

Efficiency gains from ongoing reforms, a raft of regulatory facilitations, significant physical infrastructure creation and the national digitalisation drive support the pace of growth.

In the milieu, the pertinent questions before us are:
 

• How will a global slowdown in calendar 2024 impact India’s growth?
• Amid slowing exports, can India Inc deliver healthy revenue growth in fiscal 2025?
• What will it take for India to remain the fastest-growing large economy next fiscal and over the medium term?
• How will the role of manufacturing and services evolve over the medium term?
• What is the likely trajectory of private sector investments through the emergence of new thrust areas?
• How will geopolitical volatility influence commodity prices next fiscal?

To catch the discussions and hear from the best, please mark Crisil’s flagship India Outlook Seminar, to be held on March 6, 2024, on your calendar.