New Delhi [India]: The outlook for the Indian economy remains bright due to continued strengthening of various macroeconomic fundamentals, strong financial and corporate sectors, the Reserve Bank of India said in its annual report published on Thursday. RBI said in its 284-page report. He said the government's focus on personal spending while pursuing fiscal consolidation and consumer and business optimism bode well for investment and consumption demand. The Indian economy is demonstrating strength and stability with strong macroeconomic fundamentals and financial stability. The country has emerged as the fastest growing major economy in the world and a leading contributor to global growth. For 2024-25, the government is set to spend Rs 1 trillion, or about 3.4 percent of GDP, on capital expenditure.This is about 4.5 times what it was a decade ago. The prospects for agriculture and rural activities look favorable due to El Nino and expectation of above normal south-west monsoon. El Niño is a climate pattern that describes abnormal warming of surface waters in the eastern Pacific Ocean. While extending the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) scheme for a period of five more years from January 1, 2024 will strengthen national food security, the pace of construction activities is likely to be sustained, the central bank report said. Demand for both residential and non-residential real estate will be supported, with emerging sectors such as renewable energy and semiconductors expected to make rapid progress based on recent initiatives.The production-linked incentive (PLI) scheme is likely to gain further momentum going forward. , "These factors are expected to generate new employment opportunities, improve labor income and strengthen domestic demand," the RBI said. Taking all these factors into account, real GDP growth for 2024 will be. -25 is estimated at 7.0 percent. Moving to inflation, it said easing supply chain pressures leading to a broad-based decline in core inflation and early signs of a better south-west monsoon bode well for the inflation outlook in 2024-25. Are.On an annual average basis, it declined by 1.3 percentage points (100 basis points is equal to 1 percentage point) to 5.4 per cent in 2023-24. However, the increasing incidence of climate-related shocks provides considerable uncertainty to food inflation and the overall inflation outlook. It cautioned that reservoir levels are low, especially in southern states, and the possibility of above-normal temperatures during the early months of 2024-25 requires close monitoring. It suggested, "Volatility in international crude oil prices, persistent geopolitical tensions and increasing volatility in global financial markets also pose risks to the inflation trajectory. Taking these factors into account, the 2024-25 CPI inflation outlook is estimated at 4 percent."The MPC, in its April 2024 meeting, said there is a need to continue the path of disinflation until inflation reaches the per cent target on a stable basis, keeping the policy repo rate unchanged at 6.50 per cent and noting that monetary policy will be supportive of inflation. The Reserve Bank will remain "nimble and flexible" in its liquidity management to ensure full transmission of expectations, the report said, adding that India's merchandise exports will be hit by the anticipated rebound in global trade. There should be gains, but with downside risks. Due to ongoing geopolitical conflicts and geo-economic fragmentation, the current account deficit is expected to remain manageable in 2024-25, leading to a resilient services trade balance and large inward remittance receipts. Citing remittance data, the report said India's share in world remittance receipts is projected to increase from 11.1 per cent in 2019 to 15.2 per cent in 2024 due to remittances and stable capital flows. And multilateral trade agreements are also expected to facilitate greater participation in global value chains (GVCs), expand access to new markets and leverage international trade in the Indian rupee, exports and FDI.Will campaign. flow, and strengthening the flexibility of the external sector.