Integrated Annual
Report 2023-24
Integrated Annual
Report 2023-24
Despite renewed global uncertainties during the year, mended supply chains, cheaper energy and muted commodity prices boosted domestic economic activities. Global activity proved resilient as demand and supply factors supported key economies and stronger private and government spending sustained activity, despite tight monetary conditions.
In India, stronger economic growth and rising base load demand for power led us to diversify our fuel mix, expand our operational capacity and widen our geographical spread, and contribute towards fulfilling India’s energy security requirements.
The global economy continues to confront the challenges of inflation and low growth prospects. GDP growth has been stronger than expected, but is now moderating on the back of tighter financial conditions, weak trade growth and lower business and consumer confidence.
The International Monetary Fund (IMF) predicts world economic growth to continue to grow at 3.2% during 2024 and 2025, at the same pace as in 2023. Headline inflation continued to decelerate from 6.8% in 2023 on year-on-year basis to 5.9% in 2024 and 4.5% in 2025. Despite central bank interest rate hikes to restore price stability, households in key economies were able to rely on sizeable savings built during the pandemic, contributing to surprising economic resilience. Global economic activity grew steadily, defying warnings of stagflation and global recession.
India continued to show resilience against the backdrop of a challenging global environment. Despite significant global challenges, India remained one of the fastest growing major economies. The resilience was underpinned by robust demand, strong public infrastructure investment and a strengthening financial sector. As per the IMF World Economic Outlook Report of April 2024, global economic growth is expected to be stable but slow, with global GDP growth of 3.2% for CY 2024 and CY 2025. NSO estimates India’s GDP growth at 8.2% for FY 2024.
Global trade patterns were increasingly influenced by geopolitics, with countries showing preferences for politically-aligned trade partners. There has been an overall decrease in diversification of trade partners, indicating a concentration of global trade within major trade relationships. A rise in geopolitical tensions across the world aggravated already subdued growth in Europe and China and also destabilised commodity markets and access to credit in a high interest rate environment.
India has made significant strides in improving its infrastructure activity in recent years. The government is estimated to have spent a whopping ₹ 23 lakh crore on infrastructure spending in the last three financial years (FY 2022 to FY 2024). Capital spending to GDP ratio has almost doubled from 1.6% of GDP in FY 2019 to 3.2% of GDP in FY 2024. Infrastructure is the key for enduring economic growth and is set to become the biggest driver for a country that aspires to become a USD 5 trillion economy soon and a developed nation by 2047.
India’s power demand continues its growth momentum and saw year-on-year growth of 7.5% to 1,627 billion units (BUs) in FY 2024. Apart from agriculture, industrial and manufacturing activities also contributed to the sharp rise in power demand. Amid robust industrial activity, India’s peak power demand is expected to rise to 260 GW in FY 2025 which compares to 243 GW in FY 2024.
Resurgent volatility in the commodity markets posed economic challenges in the year, as food and energy prices surged to historic highs in the recent years amid the pandemic and the war in Ukraine, prompting major supply disruptions, which was accompanied by a sharp rise in volatility in commodity prices. The swings in commodity prices weighed on long-term economic growth, especially for commodity exporters. Higher volatility in commodity prices induced greater volatility in commodity exporting countries, which also weighed on human and capital investment.
India added 18.5 GW of renewable power generation capacity in FY 2024, led by 15.0 GW of solar capacity. With the country having implemented various schemes to boost renewable energy capacity addition, cost-effective storage capacity and newer technology, it is expected to help India meet its ambitious long-term energy transition goals. The nation is targeting that non-fossil sources account for half of installed generation capacity by 2030. The Government plans to auction 50 GW of renewable energy capacity annually, with at least 10 GW/annum coming from wind energy during FY 2024 to FY 2028.
India is rapidly emerging as a global leader in renewable energy, with a robust regulatory and policy framework offering a favourable business environment for renewable energy projects in India, coupled with abundant solar, wind and hydro power potential. The government has fostered a competitive renewable energy ecosystem based on the AtmaNirbhar policy – strong incentives for capacity addition and conducive policies for research-led innovation.
Active support was provided through production-linked incentives for solar PV manufacturing and diversification of PV supply chain. The recently introduced Green Hydrogen Mission, the Green Energy Corridor scheme and Green Energy Open Access Rules have helped democratise round-the-clock energy access to small industrial and commercial consumers and to promote renewable hybrid projects.
