Glaxosmithkline Pharmaceuticals Ltd Management Discussions

Indian economic overview

As one of the fastest-growing major economies in the world, India has recorded a GDP growth of 7.6%* in FY 2023-24, owing to a strong rebound in economic activity. Rising disposable income levels have led to a notable enhancement in private consumption and spending, effectively insulating the economy from global fluctuations.

This trend is evident in the consecutive monthly growth of GST collections, accompanied by sustained optimism in business sentiment. The government is also introducing positive changes in domains including banking, taxation management and digital and physical infrastructure, to make the business environment more conducive and attract investors.

While traditionally economic growth in India has been concentrated in certain areas, but things are changing and Indias economic growth is becoming more geographically spread out. While key metropolitan centres continue to hold strategic importance, a new wave of economic hubs is rising to prominence. This diversification fosters a ripple effect, disseminating development opportunities to a wider range of regions. Recognising the potential for inclusive growth, the government has implemented a strategic focus on tier 2 and 3 cities. By prioritising infrastructure development and industrial initiatives in these smaller centres the government is fostering job creation and attracting businesses. This targeted investment serves as a potent catalyst, propelling the economic trajectory of these localities. Furthermore, enhanced connectivity is playing an important role in this economic transformation. Strategic investments in highways, railways, and airports are streamlining the movement of goods and people across the nation. This improved logistical network not only benefits urban centres but also serves to revitalise rural areas, ensuring a more inclusive distribution of economic benefits.

This trend towards more balanced geographical growth is a positive sign for Indias future.

Going forward, Indias growth is expected to remain strong, supported by improving macroeconomic factors and countrys robust internal financial stability. Indias economy is set to grow more than 7% in FY 2024-25. Currently among the top five economies globally, in the next three years, the country is expected to become the third-largest economy in the world, with a GDP of $5 trillion. Moreover, according to projections by the International Monetary Fund (IMF), Indias contribution to global growth will be around 18% by FY 2027-28; backed largely by robust domestic demand.