But challenges such as persistent inflation, a slowdown in the banking sector and environmental concerns continue to pose hurdles

India has firmly established itself as the fastest-growing economy among the G20 nations, with a projected GDP growth rate of 6.5 per cent-7 per cent for the fiscal year 2024-25. This remarkable trajectory underscores the nation’s economic resilience and immense potential despite global challenges. The year 2024 presents a vivid picture of India’s economic landscape, marked by notable achievements and emerging challenges.

One of the most significant indicators of progress is the substantial improvement in employment. The unemployment rate has decreased from 6 per cent in 2017 to an impressive 3.2 per cent in 2024, reflecting robust job creation across sectors. Foreign direct investment (FDI) has also shown a dramatic surge, rising 45 per cent year-on-year to USD 29.79 billion in the first half of 2024-25, with key inflows in services, telecom, and pharmaceuticals. Complementing this momentum, India’s foreign exchange reserves swelled to $704.89 billion, driven by an $87.6 billion increase this year alone. This growth includes a $10.468 billion boost in foreign currency assets and a $2 billion rise in gold reserves, which now stand at $65.7 billion.

India’s fintech sector continues to shine on the global stage, ranking as the third-largest fintech economy after the USA and the UK. The country also boasts the fourth-largest stock market in the world, with a market capitalisation of $4.33 trillion, surpassing Hong Kong. A significant milestone in digital payments was achieved with the Unified Payments Interface (UPI), which saw transaction values soar to an astounding Rs 200 trillion in 2024, compared to Rs 139 trillion in the previous year. India even showcased its UPI prowess on a global stage, introducing the system at the Eiffel Tower in Paris as part of a digital payments agreement with France.

The Goods and Services Tax (GST) revenue collection also reached unprecedented levels, hitting Rs 2.10 lakh crore—a substantial 12.4 per cent increase from the previous year. This growth was driven by a robust 13.4 per cent rise in domestic transactions and an 8.3 per cent increase in imports, showcasing the strength of India’s tax infrastructure.

Amid these promising figures, certain challenges continue to loom. Inflation, as measured by the Consumer Price Index (CPI), remains persistently high, exceeding 5 per cent. The banking sector has witnessed a slowdown, with credit growth declining to 11 per cent in November 2024 from 20.6 per cent the previous year. Deposit growth also moderated, with banks adding Rs 13.8 lakh crore in deposits between April and November, compared to Rs 16.1 lakh crore during the same period last year. In response, the Reserve Bank of India (RBI) reduced the cash reserve ratio (CRR) by 50 basis points to 4 per cent in December to improve liquidity and stimulate credit growth.

Qualitative indicators present a mixed picture. India climbed 14 ranks on the UNDP Gender Inequality Index, highlighting significant strides in bridging the gender gap. It also improved its position on the Global Innovation Index, rising from 40th to 39th among 133 global economies, driven by entrepreneurial activity, vibrant startups, and successful public-private partnerships. The Human Development Report 2023-24 placed India at 134th among 193 countries, reflecting gains in life expectancy, education, and Gross National Income. However, no progress was seen in the Happiness Index, where India remains at 126th, largely due to dissatisfaction among older citizens, perceived discrimination, and poor health metrics. Moreover, India continues to struggle in environmental performance, ranking 176th out of 180 countries. Challenges such as air quality, biodiversity loss, and greenhouse gas emissions demand urgent attention.

As India navigates these complexities, it is also undergoing key transitions. The US economy has entered a new phase, and India sees a shift in RBI leadership, with Sanjay Malhotra taking over as the 26th Governor after Shaktikanta Das’s tenure. While the final assessment of FY2024-25 remains pending, India’s growth story offers optimism for a brighter future and a strong foundation for the vision of ‘Viksit Bharat@2047’.

(The writer is an assistant professor at Sri Guru Gobind Singh College of Commerce, University of Delhi. Views expressed are personal)