2024 could be an unpredictable year for the
Indian economy. Being an election year, the
re-election of the current government would
provide a further push to the populist decision to
advance the economic growth of the country and
move towards the vision of a 5 trillion-dollar
economy by 2027-281. Increased capital
expenditure and divestment of public enterprises
will also continue to be a top priority of this
government. On the other hand, if a new government gets the
voters’ mandate, it might result in a brief pause
to the economy before the new government
brings in their own vision of economic
development, which is quite normal in this type
of scenario. We could see more populist
decisions in that case, where the focus could be
on providing more subsidies (free electricity, free
inputs to farmers etc.). Besides these uncertainties, ongoing geopolitical
issues such as conflicts between nations,
increasing climate risk, strict trade barriers, etc.
have disrupted supply chains and oil prices,
leading to an increase in input prices. However,
until now, India has managed to navigate the
situation with its strong diplomatic ties. The
input prices have been kept under control by
maintaining close relationships with USA, Russia,
the Middle East, and other major oil suppliers.
