India’s Macro Economic Outlook: A CFO's Viewpoint

2024 could be an unpredictable year for the Indian economy. Being an election year, the re-election of the current government would provide a further push to the populist decision to advance the economic growth of the country and move towards the vision of a 5 trillion-dollar economy by 2027-281. Increased capital expenditure and divestment of public enterprises will also continue to be a top priority of this government.

On the other hand, if a new government gets the voters’ mandate, it might result in a brief pause to the economy before the new government brings in their own vision of economic development, which is quite normal in this type of scenario. We could see more populist decisions in that case, where the focus could be on providing more subsidies (free electricity, free inputs to farmers etc.).

Besides these uncertainties, ongoing geopolitical issues such as conflicts between nations, increasing climate risk, strict trade barriers, etc. have disrupted supply chains and oil prices, leading to an increase in input prices. However, until now, India has managed to navigate the situation with its strong diplomatic ties. The input prices have been kept under control by maintaining close relationships with USA, Russia, the Middle East, and other major oil suppliers.