Key indicators point to economic resilience coupled with macroeconomic stability at end of FY 2023-24, says NCAER's March review

The PMI for manufacturing activity increased to 56.9 in February, reflecting a strong expansionary momentum.

Growth in the output of eight key infrastructure sectors rose to a three-month high of 6.7 percent in February from 4.1 percent in January 2024.

GST collections too remained buoyant, reaching a value of Rs. 1.7 lakh crore in February, registering a year-on-year growth of 12.5 percent. Collections of GST E-way bills marked an equally impressive year-on-year growth of 18.9 percent.

Bank credit growth remained strong at 20.5 percent with robust growth for personal loans, services, and agriculture and allied activities.​

“These and other markers corroborate the optimistic growth outlook of 7.6 percent growth rate for FY 2023-24 as per the Second Advance Estimates,” said NCAER Director General Dr Poonam Gupta.

“As in the past economic growth has been accompanied by indicators pointing toward macroeconomic sustainability,” Dr Gupta said, pointing out that the external sector, in particular, improved with the Current Account Deficit (for Q3 FY2023-24) moderating; remittances flow remaining high at USD 31.4 billion; services trade surplus increasing; portfolio inflows resuming; and all of this enabling a sharp increase in India’s foreign exchange reserves to nearly $650 billion.

Meanwhile, inflationary pressures remained elevated with Consumer Price Index headline inflation at 5.1 percent in February 2024, primarily due to high food price inflation and despite core inflation declining.

Strong growth combined with elevated inflation rates will likely result in a status quo on policy rates when the Monetary Policy Committee meets on April 3-5, Dr Gupta added.