Indian Economy Forecasts 7% Growth in Next Fiscal Year: Finance Ministry
According to the monthly review report from the Ministry of Finance, the Indian economy is anticipated to achieve a growth rate of nearly 7 percent in the upcoming financial year 2024-25, commencing in April. The robust performance over the past three years, driven by strong domestic demand, has led to growth rates exceeding 7 percent. In the preceding financial years, the economy expanded by 7.2 percent in 2022-23 and 8.7 percent in 2021-22. For the ongoing financial year, 2023-24, it is expected that the Indian economy will sustain its position as the fastest-growing major economy, with a projected growth of 7.3 percent.
The report from the Department of Economic Affairs attributes the strength observed in domestic demand, private consumption, and investment to the reforms and measures enacted by the government over the past decade. "The supply side has also been strengthened with investment in infrastructure - physical and digital - and measures that aim to boost manufacturing. These have combined to provide an impetus to economic activity in the country". The review report noted. "Accordingly, in FY25, real GDP growth will likely be closer to 7 percent".
There is, however, considerable scope for the growth rate to rise well above 7 percent by 2030, the report added. "The rapidly expanding digital infrastructure is continuously improving institutional efficiency. Technological progress is picking up pace with rising collaboration with foreign partners in the production of goods and services. Decisive steps have been taken to speed up human capital formation. Finally, the overall investment climate is increasingly becoming more favourable with sustained enhancement in the ease of doing business".
The projection indicates that India is poised to become the third-largest economy globally within the next three years, reaching a GDP of USD 5 trillion. Furthermore, the assertion suggests that India has the potential to aim for a USD 7 trillion economy within the next six to seven years, aiming for this milestone by 2030. "This will be a significant milestone in the journey to delivering a quality of life and standard of living that match and exceed the aspirations of the Indian people".
The optimistic outlook for the Indian economy is shaped by solid GDP growth predictions, well-controlled inflation, political stability at the central government level, and indications of the central bank adopting a more restrictive monetary policy.
