Indian economy is expected to grow at an annual median GDP growth of 7 per cent in 2024-25, the latest round of FICCI’s Economic Outlook Survey has said.
This forecast comes on the heels of Reserve Bank of India (RBI) raising its GDP growth projection to 7.2 per cent for this fiscal.
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According to the FICCI Economic Survey Results, median GDP growth is estimated at 6.8 per cent and 7.2 per cent in Q1 2024-25 and Q2 2024-25 respectively.
The median growth forecast for agriculture and allied activities for 2024-25 has been put at 3.7 per cent, higher than 1.4 per cent recorded in 2023-24.
Industry and services sectors, on the other hand, are anticipated to grow by 6.7 per cent and 7.4 per cent respectively in the current fiscal year, the survey has said.
The present round of FICCI’s Economic Outlook Survey was conducted in the month of July 2024 and drew responses from leading economists representing industry, banking and financial services sector.
The economists were requested to share their forecast for key macro-economic variables for the year 2024-25 and for Q1 (April-June) and Q2 (July-September) FY25.
The Economic Outlook Survey highlighted that the Indian economy continues to standout, but global headwinds and inflation warrant caution.
CPI Inflation
FICCI’s Economic Outlook Survey has pegged India’s retail inflation measured by Consumer Prices Index (CPI) at median forecast of 4.5 per cent for 2024-25, with a minimum and maximum range of 4.4 per cent and 5.0 per cent.
On RBI’s policy action, economists were of the view that a cut in the repo rate is expected only in the latter half of the current fiscal year.
RBI is expected to continue with its cautious approach keeping a close watch on the inflation trajectory. Policy repo rate is forecast to moderate to 6 per cent by the end of the fiscal year 2024-25 (March 2025), according to FICCI Survey.
Budget Expectations
On expectations from upcoming budget, the participating economists anticipated continuity in policy and further momentum in reforms already being undertaken by the government.
On fiscal management and expenditure, the economists mentioned that the government has done a deft job on the fiscal side. It is expected that such prudence will continue as it is important to ensure macro-economic stability, they added.
On capital expenditure, it was pointed out that the target could be increased but not much deviation was expected from ₹11.1 trillion figure that was indicated in the interim Budget for FY25.
The survey participants indicated that the focus of the forthcoming Budget could be on taxation reforms including potential revision in tax rates to boost disposable income and stimulate consumption, particularly for lower income brackets. Simplification of capital gains tax regime and a framework guiding towards streamlining of GST slabs are also expected.
Other focus area would be employment generation. The participating economists indicated announcements of an Employment-Linked Incentive Scheme, introduction of an urban counterpart of MGNREGA, increased investments in labour skilling programs and soft infrastructure, and implementation of targeted policies and support systems to increase female labour force participation.
Budget is also expected to place emphasis on innovation; sustainable development; manufacturing; housing; MSMEs; education and healthcare, according to FICCI’s Economic Outlook Survey.