FICCI Projects 7% GDP Growth for India in 2024-25

FICCI’s Economic Outlook Survey projects a robust 7% GDP growth for India in the fiscal year 2024-25. The survey, conducted in July 2024, reflects optimism among participating economists about the country’s economic prospects, though caution is advised due to global headwinds and inflationary pressures.

GDP Growth Projections

The survey forecasts an annual median GDP growth of 7% for 2024-25. Notably, the Reserve Bank of India (RBI) has also raised its GDP growth projection to 7.2% for this fiscal year. For Q1 and Q2 of 2024-25, median GDP growth is estimated at 6.8% and 7.2%, respectively.

Sector-Specific Growth

Agriculture and Allied Activities: Projected to grow at 3.7% in 2024-25, a significant increase from the 1.4% recorded in 2023-24.
Industry and Services Sectors: Expected to grow by 6.7% and 7.4%, respectively, in the current fiscal year.

CPI Inflation

FICCI forecasts India’s retail inflation, measured by the Consumer Prices Index (CPI), at a median of 4.5% for 2024-25, with a range of 4.4% to 5.0%. Economists anticipate that the RBI will adopt a cautious approach, with a repo rate cut expected only in the second half of the fiscal year. The policy repo rate is projected to moderate to 6% by March 2025.

Budget Expectations

Economists expect continuity in policy and further momentum in reforms from the upcoming budget. Key areas of focus include:

Fiscal Management

Continued prudence is anticipated to ensure macro-economic stability.

Capital Expenditure

An increase in the target is possible, but significant deviation from the ₹11.1 trillion figure in the interim Budget for FY25 is not expected.

Taxation Reforms

Potential revisions in tax rates to boost disposable income, particularly for lower income brackets, and simplification of the capital gains tax regime are expected. Streamlining GST slabs may also be a focus.

Employment Generation

Initiatives may include an Employment-Linked Incentive Scheme, an urban counterpart of MGNREGA, and increased investments in labor skilling programs and soft infrastructure to enhance female labor force participation.