Current Affairs - Economy

Nomura has lowered India’s GDP growth forecast for FY25 to 6.7%, citing factors such as reduced government spending, weaker consumer demand, and declining industrial activity. The forecast reflects a cautious outlook following lower-than-expected growth in the April-June quarter. Despite the downgrade, the medium-term prospects remain optimistic, with expectations of support from easing inflation and potential fiscal stimulus. This revision contrasts with other institutions like Goldman Sachs and J.P. Morgan, which predicted 6.5% growth, highlighting differing perspectives on India's economic trajectory.

As per the SBI report, India’s rural poverty rate in 2024 was 4.86%, a significant decline from 25.7% in FY12. Urban poverty also saw a substantial drop from 13.7% in FY12 to 4.09% in FY24. These figures highlight the country’s progress in reducing poverty across both rural and urban areas. The improvements are attributed to sustained economic growth, inflation-adjusted poverty lines, and targeted welfare measures aimed at uplifting disadvantaged communities.

In 2024, India's foreign exchange reserves surpassed $700 billion, making it the 4th largest globally. This reflects the country’s strong economic performance and its ability to attract substantial foreign investments over the past decade. The ranking signifies India's growing importance in global finance and its strategic positioning in international trade.

Deloitte forecasts the Indian economy to grow at 6.5-6.8% in FY25, driven by strong domestic consumption, infrastructure development, and digitisation efforts. While challenges such as geopolitical tensions and global liquidity constraints may pose risks, India’s resilience in services, manufacturing exports, and stable capital markets provides a solid foundation for sustained economic growth.

The Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SMY) is a central pension scheme launched in 2019 to benefit workers in the unorganised sector, such as street vendors, domestic workers, and agricultural labourers. These workers, with a monthly income of up to Rs 15,000, contribute a small premium with the government matching their contribution. Despite its ambitious goals, the scheme has faced challenges, including low enrollment, reduced government funding, and minimal coverage relative to the vast unorganised workforce, highlighting the need for revisions to enhance its effectiveness.