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Below the Note on India`s Economic Resilience by Aniruddha Naha , PGIM India AMC

Introduction: A Steady Hand at the Helm In a world teetering on the brink of uncertainty, India stands as a beacon of stability. The recent election, marking the third consecutive win for the Modi government, underscores the nation's commitment to a path of continuity and progress. This electoral triumph is not just a political victory; it's a mandate for policies that have laid the groundwork for a robust economy, ready to weather global storms. Macros: The Favourable Winds India's macroeconomic indicators paint a picture of a nation on the rise. It's quite visible in the remarkable growth numbers, India’s GDP took a big leap growing at 8.4% in the third quarter of the fiscal year 2024. The growth was propelled by strong tax revenue collections, increased government capital spending, firmness in domestic demand including rural demand, and strong growth in manufacturing and construction, the latter driven by infrastructure spending and real estate. As shown in the below charts, India remains a bright spot in the revival of the global economy. In March 2024, India's economy showcased remarkable resilience and growth, with key indicators reaching historic highs. The stock market achieved record-breaking levels, reflecting investor confidence and a bullish market outlook. Tax revenue collections also saw a significant uptick, indicating a thriving business environment. Both the manufacturing and services sectors, as evidenced by soaring PMI indices, experienced robust expansion in output, new orders, and employment, driven by strong demand and positive market conditions. This convergence of positive economic signs underlined India's economic strength and resilience amidst global uncertainties, positioning the country for continued growth. – March 2024 witnessed a significant milestone in India's tax revenue landscape, particularly in Goods and Services Tax (GST) collections. The Gross GST revenue for the month stood at an impressive ?1.78 lakh crore. Notably, this figure reflects a substantial 11.5 percent year-on-year growth, underscoring the robust health of the economy. – In March 2024, the HSBC India Manufacturing PMI surged to an impressive 59.2, a notable increase from the final figure of 56.9 recorded in the previous month. In addition to this, India’s services sector hit a peak, with exports surging to a fiscal year high. The HSBC India Services PMI soared to 61.2, marking one of the sector's most significant expansions in sales and business activity in nearly 14 years. – India’s FPI flows saw a significant turnaround in FY2023-24. Supported by rising economic growth, a favorable business environment, and strong macroeconomic fundamentals, India witnessed robust FPI inflows in FY2023-24. Net FPI inflows stood at USD 41 billion during FY2023-24, as against net outflows in the preceding two years. This is the second-highest level of FPI inflow after FY2014-15. India received the highest equity inflows among emerging market peers during FY2023-24. The imminent inclusion of India’s sovereign bonds in global bond indices is likely to spur demand for exposure to India further.

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