Macroeconomic trend of India

Reviewing the trend of macroeconomic indicators of an economy would help to understand the nature of its development path and to diagnose the need for policy treatment to set the right trend. Macroeconomic indicators reflects both the long-run and short-run status of an economy. These indicators are related to each other and influence or depend on each other and hence would indicate the strength of the economy. Therefore, frequent review and analysis of macroeconomic indicators are essential to keep the economy development oriented. Such an attempt is made in this paper to analyse the trend of macroeconomic indicators of the Indian economy. Behaviour of Macroeconomic variables such as Gross Domestic Product (GDP), Inflation, Consumer Price Index, and components of budgets (Revenue, Expenditure) are analysed. Analysis is carried out using secondary data from the relevant sources to examine the present status and the changing trend of the macroeconomic indicators of Indian economy.

⓿ Presently, India is the world’s fifth-largest economy by nominal GDP and has turned out from a mixed economy to a market economy after the New Economic Policy 1991. GDP in terms of Purchasing Power Parity ranks India third in the world, indicating its economic prowess.

⓿ Since the 1991 economic liberalization efforts, India has shown impressive economic growth, averaging around 6 to 7 percent annually. Expected to contribute more than 3.4 percent of the global economy in nominal terms and 7.2 percent in PPP terms by 2024.

⓿ India’s GDP in 2022–23 was $3.736 trillion, with a growth rate of 7.2 percent. The service sector dominates (53.0%), followed by Industry (28.2%) and Agriculture (18.8%). Notwithstanding the economic slowdown due to Covid-19, India has regained momentum.

⓿ CPI and the Consumer Food Price Index (CFPI) show a trend of decreasing inflation rates since 2014. In 2022, inflation was 6.7 percent; June 2023 witnessed CPI at 4.81 percent.

⓿ Indiax2019;s total trade volume grew from 16.0 percent of GDP in 1990–91 to 47.0 percent of GDP in 2009’10. In 2021, exports were $420 billion, and imports $612 billion, resulting in a trade deficit of $192 billion.

⓿ Net Direct Tax Collections increased by 160.17.0 percent in the last ten years. GST collection reached an all-time high of Rs 1.87 lakh crore in March 2022, indicating a fiscal-ending boom.

⓿ The fiscal deficit in India for 2022–23 was 6.4 percent of GDP, expected to decrease to 5.9 percent in 2023–24, and its aimed to bring the fiscal deficit under 4.5 percent of GDP by 2025–26.