Buoyed by strong festive activity and continued improvement in rural demand in the third quarter of the current financial year, the Indian economy showed signs of improvement in the previous quarter (April-June 2024), a Reserve Bank of India (RBI) article said.
The country’s real gross domestic product (GDP) growth fell to a seven-quarter low of 5.4 percent in July-September 2024. The RBI has projected the economy to grow at 6.8 percent in the October-December 2024 quarter.
“High Frequency Indicators (HFIs) for the third quarter of FY2024-25 indicate that the Indian economy is recovering from the slowdown seen in Q2 (FY2025), driven by strong festive activity and sustained growth in rural demand,” RBI’s Dec. State of the Economy’ article published in the Bulletin said.
E-way bills rose by 16.3 per cent (y/y) in volume terms in November (Chart III.4a). Toll collection recorded double-digit growth in both value and volume terms in November 2024. Vehicle registrations grew by double digits in November 2024 (year) with a month (month) pickup in registrations of non-transport vehicles. The country’s fuel consumption rose in November 2024, driven by crop harvests, rising rural activity and stronger air travel, it said.
This article was prepared by RBI Deputy Governor Michael Patra and other central bank officials. The views expressed in the article by RBI are those of the author and not of the institution.
India’s growth is expected to accelerate in the second half of 2024-25, mainly driven by resilient domestic private consumption demand. Supported by record levels of food production, rural demand in particular is accelerating, the article said.
“Sustained government spending on infrastructure is expected to further stimulate economic activity and investment,” it said.
However, global headwinds pose risks to the evolving outlook for growth and inflation.
The article further states that expectations around India’s resilient growth path are also coupled with an increased policy focus towards institutionalizing renewable energy, electric vehicles (EVs), green hydrogen, and green hydrogen, coupled with more sustainable foundations in keeping with positive climate action. Carbon market.
These combined efforts indicate a promising path to achieving net-zero emissions. Leveraging global frameworks for measuring climate finance, including carbon trading and green bonds, will further strengthen growth and emissions.
At the same time, India is riding the wave of digitization to boost growth, improve productivity and increase access to products and services, driven by a shift in more discerning consumer behavior and deeper access to online shopping, especially in smaller cities.
“This growth also underscores growing investor confidence and the momentum of innovative energy driving India’s fintech ascent,” the article said.
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