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India’s economy grows 8.2% in election boost for PM Modi

India to hold marathon national election from April
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India posted world-beating growth of 8.2 percent in the year to March on Friday, in a last-minute boost to Prime Minister Narendra Modi’s economic credentials the day before national elections conclude.

The world’s most populous country also remains its fastest growing major economy thanks to robust demand and huge government infrastructure spending.

That has kept sentiment positive about India’s overall economic trajectory despite chronic unemployment and immense welfare outlays to hundreds of millions of poverty-stricken citizens.

Strong growth in the manufacturing and mining sectors contributed to India’s annual growth numbers, which beat both government and analyst projections.

Finance minister Nirmala Sitharaman said the result showed India’s economy was “resilient and buoyant despite global challenges”.

India’s economy also recorded 7.8 percent growth for the March quarter, higher than the government’s projection of 5.9 percent.

ICRA chief economist Aditi Nayar told AFP that the result “exceeded both our and market expectations”.

The figures from India’s statistics ministry were published a day before the country concludes voting in general elections staged over six weeks.

Analysts widely expect Modi’s Hindu nationalist government to win a third term once results are counted on Tuesday.

The 73-year-old premier has pledged to make India the world’s third-biggest economy after the United States and China by the end of the decade.

Modi’s ruling Bharatiya Janata Party (BJP) has vowed if re-elected to maintain its focus on infrastructure spending and keep in place popular subsidies including free rations for needy families and cash handouts for farmers.

Its re-election campaign has been aided by a campaign war chest that dwarfs its rivals thanks to donations from some of India’s biggest conglomerates.

The BJP received $730 million in five years from leading companies and wealthy businesspeople through electoral bonds, a contentious political donation tool since ruled illegal by India’s top court, making it by far the biggest single beneficiary.

But Modi’s government has struggled to create enough jobs for the tens of millions of young Indians entering the workforce each year.

The International Labour Organization has estimated that 29 percent of India’s young university graduates were unemployed in 2022.

India emerged from the Covid-19 pandemic to be buffeted by a new set of global headwinds, including price spikes in global oil and food markets as a result of the war in Ukraine.

Inflation has since receded to 4.83 percent from its peak in 2022 above seven percent.

Friday’s figures put India’s economic growth higher than China, Western nations and all other major emerging economies, according to International Monetary Fund (IMF) forecasts from April.

The IMF expects growth to taper slightly to 6.5 percent for the 2024-25 fiscal year, against the Indian central bank’s forecast of seven percent.

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AFP

Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.







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