Mumbai: The Indian economy would need to navigate some of the challenges arising out of the rapid adoption of artificial intelligence and machine learning technologies, and recurrent climate shocks, even as it is poised for stronger growth over the next decade, the Reserve Bank of India (RBI) said in its annual report for FY24.
The central bank said that the growth in the next decade would come in the backdrop of macroeconomic and financial stability as India uses its demographic dividend and make the most of competitive advantages.
“…the Indian economy is navigating the drag from an adverse global macroeconomic and financial environment,” it said in the report released on Thursday.
However, real gross domestic product (GDP) growth is robust on the back of solid investment demand supported by healthy balance sheets of banks and corporates. It also said that the growth is backed by the government’s focus on capital expenditure, and prudent monetary, regulatory and fiscal policies.
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It said that even against the backdrop of subdued global economic activity and several headwinds, the Indian economy expanded at a robust pace in FY24, with real GDP growth accelerating to 7.6% (as per second advance estimate), from 7% in the previous year – the third successive year of 7% or above growth.
“The domestic economy exhibited robust growth in 2023-24, underpinned by strong investment activity, amidst subdued external demand,” it said.
The report also pointed out that inflationary pressures have moderated, although unevenly during FY24. This, RBI said, reflects the combined impact of calibrated monetary tightening, easing of input cost pressures and supply management measures.
Headline inflation softened to 5.4% during 2023-24 from 6.7%, driven by the fall in core inflation – consumer price index or CPI excluding food and fuel – to 4.3% from 6.1% in the same period.
“As headline inflation eases towards the target, it will spur consumption demand especially in rural areas,” it said.
Also Read: RBI has been managing liquidity quite well in challenging times
According to RBI, the external sector’s strength and buffers through foreign exchange reserves will insulate the local economic activity from global spillovers.
“Geopolitical tensions, geoeconomic fragmentation, global financial market volatility, international commodity price movements and erratic weather developments pose downside risks to the growth outlook and upside risks to the inflation outlook,” it said.
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HomeEconomyIndian economy needs to navigate challenges from AI, climate shocks: RBI annual report
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New government must focus on jobs, get more women to join labour force
The new government will also need to encourage women to join the formal labour force in large numbers, and create opportunities and infrastructure in poor states such as Uttar Pradesh, and Bihar that are a huge source of migrant labourers.
Devina Sengupta
First Published
06:24 PM IST
According to the latest data from PLFS, unemployment rate in urban areas for those aged 15 years and above fell to 6.7% in January–March 2024, from 6.8% a year ago.
According to the latest data from PLFS, unemployment rate in urban areas for those aged 15 years and above fell to 6.7% in January–March 2024, from 6.8% a year ago.(HT)
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Mumbai: The unambiguous political message from Tuesday’s Lok Sabha election verdict, which saw the ruling BJP fall short of a majority, is that the incoming government will need to focus sharply on job creation in a country where roughly two-thirds of the people are under 35 years, many of them unemployed, analysts said.
They say that focus now needs to be on creating higher-paying jobs, and getting companies, specially small and medium scale enterprises (SMEs), to employ at a big scale. The new government will also need to encourage women to join the formal labour force in large numbers, and create opportunities and infrastructure in poor states such as Uttar Pradesh and Bihar that are a huge source of migrant labourers.
Also read: Upskilling youth in AI, mechatronics, robotics key to job creation
“The government has to prioritize job creation in its economic policy and break from the old, defeated narrative of growth first and jobs later—jobs must fuel sustainable growth. For this, we need an industrial policy that supports sectors that absorb more labour,” said Sabina Dewan, president and executive director, JustJobs Network, a research firm. Dewan said that there needs to be immediate focus on “effective labour regulations, including for the gig economy, implementation of a statutory minimum wage and provision of social security.”
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