India's Economic Blueprint: Balancing Growth and Human Capital

The EY Economy Watch forecasts India's GDP growth at 6.5% for the fiscal year starting April 2024, emphasizing the need for a balanced fiscal strategy enhancing human capital and fiscal prudence. The report suggests boosting investment in education and health to align with high-income country levels and improve growth prospects.

In a projection that underscores India's growth potential, the EY Economy Watch report forecasts a 6.5% GDP growth for the fiscal year starting April 2024. This growth forecast, while promising, comes with a caveat: the importance of a carefully balanced fiscal strategy that enhances human capital while maintaining fiscal prudence.

The report emphasizes the necessity for India to gear its fiscal strategy towards improving education and healthcare. With the current expenditure significantly lower than high-income countries, the report recommends increasing government education spending to 6.5% of GDP by FY2048 and health expenditure to 3.8% of GDP to ensure improved access and outcomes.

DK Srivastava, Chief Policy Advisor at EY India, highlighted that India's evolving age demographics could potentially create a cycle of growth and employment. Achieving this requires strategic government investments in human capital and infrastructure, along with regional equalization transfers to reduce inequalities across states.

(With inputs from agencies.)