India’s Economy Grows: Investments, Jobs, and GST Collections on the Rise
In the April-June quarter, India’s overall investment grew by 7.5%, showing that private investments are getting stronger. Net Foreign Direct Investment (FDI) inflows rose by 52.4% in the first four months of FY25, with gross FDI inflows increasing by 23.7%, from USD 22.4 billion in FY24 to USD 27.7 billion in FY25. Key sectors like manufacturing, financial services, communication services, computer services, and energy accounted for over three-fourths of these inflows.
India’s foreign exchange reserves reached a record USD 684 billion as of August 30, 2024, increasing by USD 64 billion from January to August 2024. These reserves can cover more than 11 months of imports and all of India’s external debt as of March 2024. Rising exports and stable foreign capital inflows have strengthened India’s external sector.
Foreign portfolio investors were net buyers from April to August 2024, contributing to the high forex reserves. Goods and Services Tax (GST) collections in August were Rs 1.74 lakh crore, a 10% increase from last year. Total GST collections for 2024 so far are 10.1% higher than in 2023.
The labor market looks strong, with the Employees’ Provident Fund Organisation (EPFO) adding 10.5 lakh new members in July 2024, mostly young first-time job seekers. The report expects public expenditure to increase, boosting growth and investment.
India’s real GDP grew by 6.7% in Q1 2024-25, down from 8.2% last year, due to lower government spending and a heatwave. However, growth in non-agricultural sectors remained above 5%, and advancing monsoon has improved agricultural prospects. India’s GDP grew by 8.2% in FY 2023-24, maintaining its status as the fastest-growing major economy.
Doubts Revealed
FDI -: FDI stands for Foreign Direct Investment. It means money coming from other countries to invest in businesses in India.
Forex reserves -: Forex reserves are the money and other assets held by the central bank of a country, like the Reserve Bank of India, to back up its currency.
GST collections -: GST stands for Goods and Services Tax. It’s a tax you pay when you buy things, and the government collects this money.
EPFO -: EPFO stands for Employees’ Provident Fund Organisation. It helps workers save money for their retirement.
GDP -: GDP stands for Gross Domestic Product. It measures the total value of all goods and services produced in a country.
Q1 2024-25 -: Q1 means the first quarter of the financial year 2024-25, which is from April to June 2024.