Unemployment Rate At Lowest Level, Banks Balanced Out Slowdown In IT Services: 10 Highlights From RBI Annual Report

The Reserve Bank of India (RBI) released its annual report for the Financial Year 2023-24 on Thursday (30 May).

Here are the 10 key highlights of its assessment for India:

1. Growth: India's real GDP growth accelerated to 7.6 per cent from 7.0 per cent in the previous year. This also marks the third successive year of 7 per cent or above growth.

2. Agriculture: Growth in gross value added (GVA) in the agriculture and allied sector in 2023-24 stood at 0.7 per cent as against 4.7 per cent a year earlier.

This was because foodgrains production declined due to the deficient and uneven southwest monsoon rainfall. A renewed thrust to diversification of crops was witnessed.

3. Manufacturing: Manufacturing GVA accelerated due to corporate profitability provided by easing of input costs and sustained momentum in mining and electricity generation.

Infrastructure and capital goods production gained from the government’s push to capital expenditure. Investment amounting to Rs 1.3 trillion was approved for the establishment of three semiconductor units.

4. Services: The services sector, with a share of over 63 per cent in GVA, remained the mainstay of aggregate supply, with growth of 7.9 per cent in 2023-24.

The sustained ebullience in bank credit growth propelled financial services, while there was a slowdown in IT services during 2023-24 on subdued global demand.

5. Employment: The unemployment rate fell to its lowest level during 2023 (January-December) - 3.1 per cent in the usual status with both urban and rural areas recording a decline.

The labour force participation rate (LFPR) and worker population ratio (usual status) were 59.8 per cent and 58.0 per cent, respectively, the highest since the survey’s inception in 2017-18.

6. Inflation: Headline inflation softened to 5.4 per cent during 2023-24 from 6.7 per cent in the previous year, driven by the fall in core inflation (CPI excluding food and fuel) to 4.3 per cent from 6.1 per cent.

7. Fiscal discipline: The gross fiscal deficit (GFD) declined to 5.9 per cent of GDP in 2023-24 (RE) from 6.4 per cent of GDP in 2022-23 and revenue spending growth was contained at 2.5 per cent.

8. Capital flows: Net foreign portfolio investment (FPI) flows recorded a significant turnaround to US$ 41.6 billion in 2023-24, the second highest after 2014-15 (US$ 45.1 billion).

India received the highest net FPI inflows amongst EME peers during the year. Gross foreign direct investment (FDI) flows were resilient at US$ 71.0 billion in 2023-24, broadly comparable to US$ 71.4 billion a year ago.

9. UPI: The UPI platform achieved significant milestones, surpassing 13 billion transactions in a single month in March 2024, while the average ticket size reduced signaling its growth in retail payments.

10. Financial inclusion: The RBIs Financial Inclusion Index (FI-Index), a measure to assess the extent of financial inclusion in the country, improved from 56.4 in March 2022 to 60.1 in March 2023.

This shows growth across the three sub-indices of access, usage and quality. Improvement in FI-Index was mainly contributed by usage and quality dimensions, reflecting deepening of financial inclusion.