Economic Survey: Real GDP of India's for Fiscal 2026 Projects at 6.3-6.8pc
Economic Survey: Real GDP of India's for Fiscal 2026 Projects at 6.3-6.8pc
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Economic Survey 2024-25: India’s real GDP growth for the financial Year 2024-25 is projected to be between 6.3 percent  and 6.8 percent, according to the Economic Survey tabled today, January 31, 2025. The survey suggests that economic conditions might remain sluggish next year.

For India to achieve its goal of becoming a developed nation by the 100th anniversary of independence, it needs to maintain a growth rate of around 8 percent  for the next decade or two, the survey states. However, it also notes that global factors, like political and economic conditions, will play a big role in shaping the country’s growth.

The survey highlights that the fundamentals of India’s economy are strong, with a solid external account, controlled fiscal consolidation, and stable private consumption. While global inflationary pressures have been easing, risks still exist due to potential geopolitical issues, such as tensions in the Middle East and the ongoing Russia-Ukraine conflict. Central banks worldwide have adopted more relaxed monetary policies, though the pace of rate cuts varies, potentially affecting the economic recovery in different regions.

India’s manufacturing sector has been weak, and corporate investments have slowed, which is expected to bring the country’s growth rate to 6.4 percent  in 2024-25 to be its slowest pace in four years. This is a sharp drop from the growth seen in FY24, when India’s GDP grew by 8.2 percent , making it the fastest-growing major economy.

On a positive note, investment activity is expected to rise, supported by higher public spending and improving business confidence. Manufacturing capacity utilization remains high, and private sector orders are growing. However, global overcapacity in sectors like steel may dampen these gains, the survey cautions.

There have been increasing concerns about the Indian economy, as growth slowed to 5.4 percent  in the second quarter of FY25, down from 8.1 percent  in the same period last year. Factors like slower business spending, high inflation, and falling wages have affected consumer behavior and corporate profits.

The slowdown has led some experts to question whether the post-pandemic economic boom was just a temporary rebound. This slower growth rate presents challenges for the Modi government, especially after last year’s elections, where economic issues like high inflation cost the Bharatiya Janata Party seats.

Prime Minister Modi aims to make India a developed nation by 2047, but experts believe this will require sustained growth of around 8 percent . Both the International Monetary Fund (IMF) and the World Bank estimate India’s growth at 6.5 percent  and 6.7 percent , respectively, for the coming years. Goldman Sachs has a more cautious prediction, estimating 6 percent  for the current fiscal year and 6.3 percent  for FY26.

Before the pandemic, India’s economy grew at an average rate of 7 percent , which is considered the economy’s potential growth rate by the central bank.

 

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