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The finance ministry in its report has said that India's improved monsoon performance, continued expansion in manufacturing, and vigorous capital expenditure (capex) spending by the public and private sectors augur well for macroeconomic stability and growth during FY24. However, it cautioned that cross-border spillovers and adverse global developments can act anytime as a deterrent to achieving the potential high growth path in the current financial year.

It further said the government's emphasis on capex in recent years has given a much-needed thrust to investments in key infrastructure, which has resulted in crowding in of private investment to kickstart the virtuous circle of job creation, income, productivity, demand, and exports supported by favourable demographic dividend over the coming years.

According to the report, despite adverse global developments, India’s exports are also expected to perform well, driven by strong performance in services exports. Increased digitisation drive, growing preference for remote working and increased proliferation of Global Capability Centres are expected to further increase India’s services exports. Accompanied with an easing of supply chains and a decline in global commodity prices, the trade deficit is expected to improve further in the coming years.