The year 2024 opens with a 7%+ growth forecast, a buoyant stock market, and a set of financial indicators that are looking better than they have in the last several years. This presents a dramatically altered landscape from just two years ago, when we were emerging from the shadows of the pandemic.
Amidst a global economy grappling with uncertainties, India’s growth trajectory stands out, reflecting resilience and potential in comparison to most other markets.
Several structural reforms have reinforced our growth narrative.
GST has integrated the national market while Aadhaar, Jan Dhan and UPI have brought financial inclusion to even the poorest Indian. Investments in roads, ports, highways and tech infrastructure have physically and digitally connected the entire country.
These reforms, I believe, have now fired up risk capital. And, as we have seen in previous cycles, when the tide of business confidence turns, it can surprise with its speed and vigour. When business confidence crosses its inflexion point, it carries the investment cycle into a multi-year boom.
Over the last few years, the government has taken the lead in driving investments. The strong growth in government capex — highest in 19 years as a % of GDP — has been a key growth driver. In the first half of this fiscal, state capex has also picked up very smartly. Large, well capitalised conglomerates have been investing ahead of the cycle over the past few years. And now, we are seeing signs of even mid-sized corporates investing for growth. The new year, therefore, could see the broad basing of India’s rising investment cycle. I believe in 2024, all engines of the capex cycle — Centre, states, corporates, households — will start to fire. And this is the big trend that I am watching out for.
At its core, private investment is a vote of confidence in the economy.
It drives innovation, creates employment, and stimulates economic activity.
In 2024, as private investments gain momentum, we will see a ripple effect across various sectors — from manufacturing to technology, from infrastructure to renewables.
The true measure of this investment surge will be in its ability to generate jobs. As India’s entrepreneurial energy is unleashed and diverse sectors expand, the job market is expected to witness a significant uptick.
The emphatic revival of private investments could well be the defining trend of 2024. This will set the stage for sustained economic growth and a reshaping of the global economic order.
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