NCAER noted that bank credit growth remained strong at 20.5 per cent with robust growth for personal loans, services, agriculture and allied activities.
Key markers point to the Indian economy remaining buoyant at the end of 2023-24 with Purchasing Manager's Index (PMI) for manufacturing increasing and that of services maintaining a robust trend, as per the monthly economic review by the National Council of Applied Economic Research (NCAER).
The PMI for manufacturing activity increased to 56.9 in February, reflecting a strong expansionary momentum, as growth in the output of eight key infrastructure sectors rose to a three-month high of 6.7 per cent in February from 4.1 per cent in January, NCAER said in its review for March that was released on Sunday.
The economic think tank added that goods and services tax (GST) collections, too, remained buoyant, reaching Rs 1.7 lakh crore in February, registering a year-on-year growth of 12.5 per cent, while collections of GST E-way bills marked an equally impressive year-on-year growth of 18.9 per cent.
NCAER noted that bank credit growth remained strong at 20.5 per cent with robust growth for personal loans, services, agriculture and allied activities.
"These and other markers corroborate the optimistic growth outlook of 7.6 per cent growth rate for 2023-24 as per the second advance estimates," NCAER Director General Poonam Gupta said.
"As in the past, economic growth has been accompanied by indicators pointing toward macroeconomic sustainability," she said, pointing out that the external sector, in particular, improved with the Current Account Deficit (for the December quarter, FY24) moderating; remittances flow remaining high at USD 31.4 billion; services trade surplus increasing; portfolio inflows resuming; and all of this enabling a sharp increase in India's foreign exchange reserves to nearly USD 650 billion.
Meanwhile, NCAER said inflationary pressures remained elevated with Consumer Price Index headline inflation at 5.1 per cent in February, primarily due to high food price inflation and despite core inflation declining.
Strong growth, combined with elevated inflation rates, will likely result in a status quo on policy rates when the Monetary Policy Committee meets on April 3-5, Gupta added.