Indian economy to grow 7-7.2% in FY25 on strong government spending: Deloitte

Deloitte India has projected that the Indian economy could grow between 7-7.2% in the current fiscal year, driven by robust government spending and increased manufacturing investments. However, a tempered global growth outlook may impact the forecast for the next fiscal. In its 'India Economy Outlook for October 2024,' Deloitte noted that a thriving manufacturing sector, stable oil prices, and potential monetary easing in the United States post-elections could enhance capital inflows, reduce production costs, and create job opportunities. The economy recorded a growth rate of 6.7% YoY in the April-June quarter of 2024-25, marking the slowest growth in five quarters. Yet, India remains one of the fastest-growing major economies globally.

The Reserve Bank of India (RBI) had previously projected a 7.2% expansion for the Indian economy, supported by strong domestic activity. Deloitte highlighted that domestic factor such as moderating inflation, better rainfall, and record kharif production, coupled with increased government spending in the latter half of the year, will contribute to growth. Nevertheless, a slow recovery in Western economies may impact India's exports in the coming fiscal year. The report also emphasised the importance of job creation for steady household income. It noted improvements in employment shares in both the manufacturing and services sectors. Implementing schemes like production-linked incentives has aided in recovering job shares, with the services sector's employment share rising from 28.9% in 2022-23 to 29.7% in 2023-24.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.