A Reserve Bank of India (RBI), in an article, said that the Indian economy was showing signs of recovery after a slowdown in momentum in the previous quarter. (April to June 2024).
In July-September of 2024, the country's real Gross Domestic Product (GDP), which is a measure of gross domestic product, fell to its lowest level in seven quarters at 5.4 percent. The RBI projected that the economy would grow by 6.8 percent in the quarter of October-December 2024.
The article titled 'State of the Economy,' published in the December Bulletin of the RBI, stated that "High frequency indicators" (HFIs), for the third quarter of FY2024-25, indicate the Indian economy has recovered from the slowdown of momentum seen in Q2 of FY2025. This recovery is attributed to strong festival activity as well as a sustained increase in rural demand.
In November, the volume of e-way bills increased 16.3 percent (y-o y) (Graph III.4a). In November 2024 toll collections grew by double digits, both in volume and value terms. In November 2024, vehicle registrations grew by double digits year-over-year (y-o y), with an increase in non-transport vehicles. Fuel consumption in the country increased in November 2024 due to farm harvesting, rural activity, and robust air travel.
Michael Patra, the RBI's deputy governor, and other officials from central banks prepared this article. The RBI stated that the opinions expressed in the article were those of the authors, and not the institution.
India's growth trajectory will accelerate in the second half 2024-25, primarily due to a resilient demand for private consumption at home. The article stated that rural demand is growing, mainly due to the record-high foodgrain production.
It said that "sustained government expenditure on infrastructure will further stimulate economic activity, and investment."
The global headwinds pose a risk to the future outlook of growth and inflation .
In the article, it was also stated that India's growth trajectory is expected to be resilient in the future, but with a more sustainable foundation, as a result of climate action. This includes a greater focus on renewable energies, electric vehicles (EVs), and green hydrogen.
These coordinated efforts point to a promising route towards achieving net-zero emission. The use of global frameworks to facilitate carbon trading, and the scaling up of climate finance including green bonds will reinforce the decoupling between growth and emissions.
India, too, is riding the digitalisation wave to boost its growth, increase productivity, and expand the reach of services and products. This is a result of a shift in consumer behavior and the growing popularity of online shopping in small towns.
The article stated that "this surge also highlights a growing investor's confidence and the momentum behind innovative energies which are driving India's FinTech ascent."
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