The Indian economy is projected to grow at 6.8% in the next fiscal year, according to a report by ratings agency Crisil, slightly below the central bank’s forecast of 7%, due to higher interest rates and reduced fiscal impulse. By FY31, the economy is expected to approach the US$ 7 trillion mark, with an average annual growth rate of 6.7%, positioning India as an upper-middle-income country within the next seven years. Despite the slightly lower growth forecast for FY25 compared to the RBI’s projection, Crisil maintains that India will retain its status as the world’s fastest-growing major economy. The agency attributes this growth to reduced input costs, improved agricultural production, and stable oil and commodity prices, which are expected to contribute to a dip in inflation in the next fiscal year.
Key sectors like mining, manufacturing, construction, and services are driving India’s economic expansion, with significant private sector investments, government infrastructure spending, ongoing reforms, and advancements in digital and physical connectivity expected to sustain growth momentum throughout the decade. Mr. Amish Mehta, managing director and chief executive of Crisil Ltd., highlights the positive outlook for India’s domestic manufacturing sector, fueled by factors such as high-capacity utilization, global supply chain diversification opportunities, infrastructure investment focus, green transition priorities, and strong lender balance sheets. Continuous reforms and increased global competitiveness are expected to enhance the manufacturing sector’s contribution to India’s GDP beyond the anticipated 20% by FY31.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.