India Is Fastest Growing Large Economy Globally In CY23-24: Report

Amid the geopolitical crisis across the globe, India is the fastest-growing large economy globally in calendar year (CY) 2023 to 2024, according to a report by Pantomath Financial Services Group. The report, which highlighted 2023 performance and 2024 outlook, stated that the Indian equity market has emerged as one of the best-performing markets in the last two years. Moreover, the Domestic SIP inflows emerged as a key source of retail inflows in equities, reaching Rs 130 billion in FY2023 and is projected to reach Rs 153 billion in FY24.

In 2023, the Indian equity market witnessed a phenomenal performance, as benchmark indices soared to unprecedented highs, with the Nifty and Sensex scaling milestones of 21,000 and 70,000 mark, respectively. Indian equity emerged as one of the best-performing markets in the last two years. Indian market fell relatively much less in CY 2022 compared to other global Markets.

On the other hand, broader indices outperformed, the National Stock Exchange (NSE) Midcap 100 and NSE Small-cap 250 advanced 40. 9 per cent and 42 per cent respectively in CY 2023. India’s market cap is up 26 per cent in the current calendar year to USD 4.

2 trillion. India added USD 900 billion in market cap in 2023, equivalent to the entire market cap of countries such as Brazil, Sweden and the Netherlands. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors said, “The Indian corporate earnings began showing improvement, with companies benefiting from a softening in commodity prices, leading to enhanced profitability and margins.

Companies are expected to continue strong performance in the upcoming quarters, driven by a robust domestic demand environment, positive macroeconomic factors and private capex revival. ” Lunawat added that a visible revival in private capex along with sustained pick up in govt capex bodes well. A record capex of Rs 26 lakh crore vis-à- vis Rs 10-12 lakh crore four years back will continue to foster momentum.

Devang Shah, Head of Retail Research, Asit C Mehta Investment Intermediates said, “The year witnessed robust Industrial Production (IIP) growth and favourable PMI data, indicating an expansion in output at an above-trend pace. The manufacturing sector sustained its growth momentum, driven by a consistent inflow of new orders. ” Shah mentioned that many companies experienced a notable uptick in sales during the festival season.

While the Consumer Price Index (CPI) started to moderate from its peak levels, it remained above the Reserve Bank of India’s comfort range of 2 per cent to 4 per cent. “Concerns about inflation persist, particularly about the risk of an increase in food inflation, according to the RBI. The government aims to address supply issues proactively to prevent any sharp spikes in food and vegetable prices,” Shah added.

Similarly, with an eye toward overall growth and development, the Indian central government pushed policies and initiatives in 2023 to strengthen several important economic sectors. With special emphasis on manufacturing, fintech, green growth, and new technologies, the government is actively building both digital and physical infrastructure for businesses across sectors. As a result, sectors such as Agriculture, Railway, Automobile, Defence, Telecom, Infrastructure, Capital Goods, Renewable Energy, Electronics Manufacturing Services (EMS) and Real Estate have become priority sectors.

Government investment and policy reforms will be used to support these priority sectors in the coming years. Indian Economy Outlook For 2024 The momentum achieved during the CY 2023 with strategic measures by the government is indicating medium- to long-term GDP growth in India. As per S&P Global Ratings, India is set to become the third-largest economy by 2030, and the paramount test for the country would be to become the next global manufacturing hub.

The country’s robust economic trajectory is underpinned by resilient growth and favourable demographics. India is the most populous country in the world and where the median age is 28. 2 years.

Recovery in domestic demand, particularly in private consumption and household spending, after a prolonged pandemic, should facilitate business expansion plans. Feeding into this are India’s large consumer base, rising urban incomes, and the aspirations of the world’s largest young population. The public capex push by the government is ultimately now achieving its aim of beginning the private capex revival of Indian companies.

The balance sheet of Indian companies also shows less or moderate leverage, Lunawat said. He added, “The proactive policies of the RBI are beneficial for banks for any kind of unexpected domestic and global financial risk. Banks are also at comfortable levels, with constantly falling NPA levels and a pick-up in credit growth.

The companies are also in a sound position to boost investments. ” The report added that India’s digital economy will continue to attract investors as technology-based solutions are sought to transform people’s lives, governance and enterprise operations. The rapid growth in demand for online products and services is also a reflection of the increasing spending power of India’s non-metropolitan (tier-two and tier-three) cities.

The digital economy accounted for 4 to 4. 5 per cent of the total gross domestic product (GDP) in 2014 and is currently at 11 per cent. The government projects the digital economy to make up more than 20 per cent of Indian GDP by 2026.

“Key industries beckoning foreign investors in India in 2024 include healthcare and insurance, fintech, renewable energy and climate tech, electric vehicles and automobiles, IT and services, real estate and infrastructure, fast-moving consumer goods (FMCG), and R&D, tech innovation, and artificial intelligence (AI),” stated Shah. He added that these have all been on a hot streak in 2023, as foreign direct investment (FDI) policies have relaxed in recent years and production-linked incentive (PLI) schemes have been promoted. .