|
India's economy is projected to grow between 6.3 per cent and 6.8 per cent in the next financial year 2025-26, said Economic Survey 2024-25, tabled in Parliament on Friday.
The survey, tabled a day before the union budget, highlights that the country's economic fundamentals remain strong, supported by a stable external account, fiscal consolidation, and private consumption. It noted that the government plans to strengthen long-term industrial growth by focusing on research and development (R&D), micro, small, and medium enterprises (MSMEs), and capital goods. These measures aim to enhance productivity, innovation, and global competitiveness. "The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 per cent," it said. The survey noted that food inflation is expected to ease in Q4 FY25 due to the seasonal decline in vegetable prices and the arrival of the Kharif harvest. A good Rabi production is also expected to help keep food prices in check in the first half of FY26. However, adverse weather conditions and rising international agricultural prices pose risks to inflation. Meanwhile, global energy and commodity prices have softened, making the core inflation outlook stable. However, uncertainties in the global political and economic environment remain a challenge. The survey also added that India's foreign exchange reserves remain strong, covering 90 per cent of external debt and providing an import cover of over ten months. The reserves increased from USD 616.7 billion in January 2024 to USD 704.9 billion in September 2024 before moderating to USD 634.6 billion as of January 3, 2025. The stability in capital flows has played a key role in supporting India's external strength. The survey also highlighted significant growth in the formal employment sector. Net Employees' Provident Fund Organisation (EPFO) subscriptions have more than doubled from 61 lakh in FY19 to 131 lakh in FY24. "The formal sector in India has seen significant growth, with net Employees' Provident Fund Organisation (EPFO) subscriptions more than doubling from 61 lakh in FY19 to 131 lakh in FY24," it said. The Economic Survey presents a positive outlook for India's economic growth in FY26, backed by strong macroeconomic fundamentals, rising formal employment, and stable external reserves. However, risks such as global uncertainties, adverse weather events, and international price fluctuations remain key challenges for the economy in the coming year. In another key guidance, the Economic Survey suggested that India needs to grow around 8 per cent for a decade or two to achieve its Viksit Bharat dreams, at a time when the country's growth showed weak progress in the first two quarters of the current financial year. India aims to become a developed nation by 2047 when the country celebrates its 100th year of Independence. To realise its economic aspirations of becoming Viksit Bharat by the time of the centenary of independence, India needs to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two, the State of the Economy report tabled in the Parliament by finance minister Nirmala Sitharaman said. The Indian economy grew by 5.4 per cent in real terms in the July-September quarter of the current financial year 2024-25. The quarterly growth was lower than RBI's forecast of 7 per cent. In the April-June quarter too, India's GDP grew at a slower pace than was estimated by its central bank. The Reserve Bank in its latest monetary policy had cut India's growth forecast for 2024-25 to 6.6 per cent from 7.2 per cent. The government expects 6.4 per cent growth. India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24 and continued to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22. (ANI)
|
