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Indian economy estimated to grow 7-7.2% in FY25: Deloitte
Industry News- Aug 06,24
The Indian economy grew at 8.2% in the 2023-24 fiscal year.
Deloitte India forecasts the Indian economy will expand by 7-7.2% in the current fiscal year, supported by strong economic fundamentals and on-going domestic policy reforms. The firm's August update highlights that initiatives in the Union Budget 2024-25 aimed at enhancing agricultural productivity, creating youth employment, boosting manufacturing, and improving finance access for micro, small, and medium enterprises (MSMEs) will drive supply-side demand, manage inflation, and support consumer spending, particularly in rural areas.
Rumki Majumdar, Economist, Deloitte India noted that while the first half of the year may be uncertain, robust growth is expected in the latter half due to stable domestic policies, reduced US uncertainties post-elections, and synchronised global growth within a low-inflation environment. Improved global liquidity conditions from easing monetary policies in the West will also enhance capital flows and private sector investments.
The report suggests that addressing urban-rural spending disparities, inflation, and employment issues will significantly improve rural consumer affordability. Deloitte’s growth projection aligns with the Reserve Bank of India’s forecast of 7.2% but exceeds the Finance Ministry's Economic Survey estimate of 6.5-7%. The Indian economy grew at 8.2% in the 2023-24 fiscal year.
Despite strong growth, private consumption has been modest recently due to the pandemic, high inflation, and poor agricultural output affecting rural demand. However, Deloitte research indicates a shift towards non-food and discretionary items, with increasing spending on durable goods and processed foods in both rural and urban areas.
The report highlights that if income increases in states lead to more equitable distribution and higher rural spending, businesses will benefit from a larger and more sustainable consumer base.
(ET)
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