Consider the following statements:
1. India's GDP growth in FY24 is estimated to be higher than the average growth rate of the pre-pandemic period.
2. Investment activity, as measured by Gross Fixed Capital Formation (GFCF), has crossed pre-pandemic levels.
3. Government capital expenditure has contracted in FY24 due to fiscal consolidation.
Which of the statements given above is/are correct?
(a). 1 and 2 only
(b). 2 and 3 only
(c). 1 only
(d). 1, 2 and 3
Explanation Statement 1 is correct: India's GDP growth in FY24 is estimated to be higher than the average growth rate of the pre-pandemic period. India's GDP growth for FY24 is estimated at 8.2% . The average GDP growth in the two decades before the pandemic was approximately 6.5% . Since 8.2% is higher than 6.5%, this statement is correct.
Statement 2 is correct: Investment activity, as measured by Gross Fixed Capital Formation (GFCF), has crossed pre-pandemic levels. GFCF as a percentage of GDP increased to 30.8% in FY24, surpassing the pre-pandemic average of 28.9% observed during FY15 to FY19 . This indicates that investment activity has exceeded pre-pandemic levels.
Statement 3 is not correct: In the Union Budget for FY24, the Indian government allocated ₹11.11 lakh crore for capital expenditure, representing 3.4% of GDP. This allocation marked a significant increase compared to previous years, indicating a strong commitment to infrastructure development and economic growth.
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