Finance Minister Nirmala Sitharaman said during the winter session of Parliament on Thursday that India was not only the fastest growing economy in the world but also had the highest growth rate in the second quarter of the current financial year (Q2FY24) in the world.
The Finance Minister spoke about the progress made by the Indian economy under the Prime Minister Narendra Modi-led central government, stating that the country's economy had grown from the tenth largest in 2014 to the fifth largest in 2023. Moreover, India has the most economic growth. significant growth in the July-September quarter of 7.6 percent.
Sitharaman said, “India's second quarter growth is the highest in the world as India continues to be the fastest growing economy. The third and fourth largest economies (Japan and Germany) have shrunk, as have emerging economies. percent growth is significant.”
Make in India program and PLI programs boost manufacturing
The Finance Minister also informed the Rajya Sabha that India's manufacturing sector had registered the highest growth of 13.9 per cent in Q2FY24. Sitharaman attributed this to Prime Minister Modi's “Make in India” initiative and the numerous production-linked incentive (PLI) schemes launched under the Bharatiya Janata Party (BJP) government.
“All sectors are growing significantly. Thanks to the Make in India program and PM Modi's plans, the manufacturing sector is also contributing significantly to the economy. The manufacturing sector contributes 13.9 percent to the economy. The PMI (Purchasing Managers Index) in November was 56. It is in the expansion zone, so continued growth is indicative of growth,” she said.
She also cautioned against comparing India's PMI with global counterparts as developed countries are reporting shrinking figures while India was in an expansion phase.
Indian exports are resilient despite the decline in global demand
FM Sitharaman stated that India had recorded 9.43 percent year-on-year growth to USD 62.26 billion by October 2023. She said: “Despite declining consumption and demand in Western economies, our exports are doing well.”
Moreover, India exceeded expectations by recording a 6.21 percent increase in goods trade, while the World Trade Organization (WTO) had forecast the figures to decline to 0.8 percent.
Last year (2022-2023), India was also reportedly the second largest mobile phone manufacturer, with exports worth $10 billion.
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Growth in direct taxes
Direct tax collection grew by 21.82 percent this year, with monthly GST collection stabilizing at Rs 1.6 trillion. This indicates a sign of economic growth, according to the FM.
The FM also added, “States receive 100 percent of the state tax, it doesn't touch anyone.” In addition, 50 percent of the integrated GST (IGST) also goes to states, while 41 percent of the central GST (CGST) share is given to states based on the recommendations of the finance commission.
“India is the second most sought-after manufacturing destination in the world,” said Prime Minister Nirmala Sitharaman, addressing the Upper House during the ongoing winter session of Parliament.
The FM had also stated earlier in the day that there would be no “spectacular announcements” on the February 1, 2024 budget, adding that a vote on account would take place ahead of the 2024 general elections.