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The FY 2023-24 Union Budget is geared towards bolstering India’s economic prowess. As India celebrates its 75th year of independence, the world has acknowledged its economy as a “bright star” with an estimated economic growth rate of 7%, surpassing all other major economies.
On December 1st, 2022, India’s assumption of the G20 presidency from Indonesia marks a momentous occasion. As the world’s largest democracy and fastest-growing economy, India’s leadership will be crucial in building upon the accomplishments of the previous 17 presidencies.
Under the banner of the Amrit Kaal initiative, India has set out on a mission to foster a shared global future through the LiFE movement, promoting eco-conscious practices and sustainable living. With a development-focused approach and a clear roadmap, India is committed to promoting a rules-based order, equitable growth, and peaceful coexistence for all. Through over 200 planned events leading up to the 2023 Summit, India’s G20 presidency will bolster its agenda and six key thematic priorities.
In 2022, India celebrated its 75th year of independence and achieved the status of the world’s fifth-largest economy in terms of current dollars. As of March, the nominal GDP of India is estimated to be around US$ 3.5 trillion, with a projected real GDP growth of 7% for the fiscal year ending in March 2023, following an 8.7% growth in the previous financial year. Inflation has significantly slowed down, with an annual rate below 6% and wholesale prices rising at a rate below 5%. The export of goods and services in the first nine months of the current financial year (April-December) has increased by 16% compared to the same period in 2021-22. Despite a high oil price causing an increase in India’s import bill and leading to a larger merchandise trade deficit, concerns over the current account deficit and its financing have decreased as the year has progressed. India’s foreign exchange reserve levels are comfortable, and external debt remains low. More details
In the financial year 2021-22, the economic recovery gained further momentum, with GDP growing 20.1% during April to June 2021, as compared to contraction of 24.4% in Q1 2020-21. In the second quarter of 2021-22 (July to September), India’s GDP increased by 8.4% (Rs. 35.73 trillion) over the corresponding period of 2020-21. The growth trend continued in the third quarter (5.4%) as well as in the fourth quarter. As per data released by National Statistical Office (NSO), Ministry of Statistics and Programme Implementation on 31st May 2022, India’s GDP at Constant (2011-12) Prices in Q4 of 2021-22 (January to March 2022) was estimated at Rs 40.78 trillion, showing a growth of 4.1. Overall, India’s GDP in 2021-22 grew by 8.7% as compared to (-) 6.6% in the previous year. More details
With a resolve to convert the economic setback due to the COVID-19 pandemic into an opportunity to make India self-reliant, and a bigger, stronger and more important part of the global economy, the Prime Minister launched the Atmanirbhar Bharat Abhiyan (self reliant India programme) on 12 May 2020 with the announcement of a stimulus package worth nearly Rs.21 trillion (US$277 billion), equivalent to around 10 per cent of national GDP, designed to open up new avenues of trade and investment in the post-Coronavirus economy. This was followed with further stimuli in October and November 2020, taking the total value of stimulus package to Rs. 29.87 trillion, i.e. about 15% of national GDP. Further, the Government of India has shown an appetite for bold policy reforms relating to agriculture markets, labour laws and redefinition of MSMEs, as well as taking concrete steps for employment generation and to create new opportunities for trade and investment.
The implementation of Atmanirbhar Bharat package and calibrated unlocking of the economy have ensured that economic recovery in India has gained momentum across all sectors. As a result, India received its highest ever total FDI inflow of US$ 83.57 billion in 2021-22, up from US$ 81.72 billion during the year 2020-21, bettering the previous high of US$ 81.72 billion in 2020-21.
At the Investor’s Roundtable organised by Department for Promotion of Industry and Internal Trade (DPIIT), along with Invest India, on 20th April 2022, it was highlighted that India received the highest ever FDI in the last two years.
As per UNCTAD Global Investment Trends Monitor, 2022, the Foreign Direct Investment (FDI) flows to India in calender year 2021 were 26% lower as compared to 2020, because large M&A deals recorded in 2020 were not repeated. (UNCTAD GITM), January 2022, 2022, the Foreign Direct Investment (FDI) flows to India in calender year 2021 were 26% lower as compared to 2020, because large M&A deals recorded in 2020 were not repeated.
However, the World Investment Report 2022, (UNCTAD, 9 June, 2022) ranks India as the world’s 7th highest recipient of FDI in 2021 calender year, up one notch as compared to the eighth rank in 2020.
Over the years, India has successfully positioned itself as one of the most attractive destinations for Foreign Direct Investment across the globe. India’s FDI inflows have increased 20-fold since FY03-04, when the inflows were US$ 4.3 billion only.
India was the fourth major host of greenfield FDI projects and eighth major host of cross-border M&A deals between 2004 to 2015, according to a research paper titled ‘Future of Regional Cooperation in Asia and Pacific’ released on the Asian Development Bank website on 25 November 2020.
Since January 2020, the Coronavirus (COVID-19) pandemic has taken a huge toll on the global economy. In India as well, the impact of the national lockdown imposed in March 2020, followed by cautious “un-locking” since June 2020, resulted in 6.6% in the GDP for the year 2020-21.
