Centre’s policies have made India fastest growing economy: FM

Policies of the central government like production-linked incentive (PLI) scheme and Make-in-India have helped develop India as the second most sought after manufacturing destination and the fastest growing economy in the world, Finance Minister Nirmala Sitharaman said on Thursday.

Replying to a debate in Rajya Sabha, the upper house of Parliament, Sitharaman said, “All sectors are growing significantly. Because of the Make-in-India programme and PM Modi’s schemes, the manufacturing sector is also significantly contributing to the economy.”  

She noted that manufacturing sector growth surged to 13.9% in the second quarter of the current financial year.

Referring to S&P Global data, the finance minister said Purchasing Managers’ Index (PMI) in November stood at 56. “It is in the expansionary territory,” she added.

PMI for manufacturing rose to 56 in November from 55.5 recorded in the previous month, on the back of strengthening demands and low input costs, as per data released by S&P Global earlier this month. The PMI print above 50 indicates growth in the sector while below 50 shows contraction. Manufacturing PMI has been above 50 for 29 months in a row.

Sitharaman noted that India’s economic growth in the second quarter of the current financial year was the highest in the world. India’s gross domestic product (GDP) expanded by 7.6% in July-September period, sharply higher than the Reserve Bank of India’s forecast of 6.5%. The growth was led by the better-than-expected expansion in manufacturing and construction sectors, as per the latest National Statistical Office (NSO) data.

“India’s second quarter growth is the highest in the world as India continues to be the fastest-growing economy. The third and fourth largest economies (Japan and Germany) have contracted as well as emerging economies. In comparison, India’s over 7% growth is significant,” the finance minister said.

India’s economic growth in the first quarter of the current financial year stood at 7.8%.

The finance minister also underlined the recent uptick in India’s exports. After eight consecutive months of decline, India’s exports increased by 6.21% year-on-year to $33.57 billion in October.

She informed the parliament that the revenue collection from direct taxes have surged by 21.82% year-on-year till November 9 in the current fiscal, while average monthly GST collection in 2023-24 so far stands at around Rs 1.6 lakh crore.

“The activities are all across the economy. It’s not as if one sector is doing well…all sectors are growing and growing significantly (enough) for us to notice it,” she added.