Increased Rural Demand To Propel Indian GDP Growth To 7 % In FY25: CEA

2024-03-01 02:16:08

(MENAFN- KNN India) New Delhi, Mar 1 (KNN) Chief Economic Adviser V. Anantha Nageswaran has projected a robust 7 per cent GDP growth for India in the fiscal year 2025 (FY25), continuing the country's post-pandemic economic momentum for the fourth consecutive year.

Nageswaran attributes this anticipated expansion to various factors, including expectations of a normal monsoon, enhanced rural demand, and improved levels of private and public investment, reported FE.

The latest government estimate, released on Thursday, indicates that India's real economic growth is likely to accelerate even further, reaching 7.6 per cent in FY24, surpassing earlier projections of 7.3 per cent.

This growth trajectory compares favourably with previous fiscal years, notably 7 per cent in FY23 and 9.7 per cent in FY22, following a contraction of 5.8 per cent in the COVID-affected FY21.

Nageswaran underscores that the bulk of GDP growth stems from robust non-agricultural expansion on the supply side, coupled with significant investment growth on the demand side.

However, a notable concern lies in the deceleration of consumption expenditure growth, which has now slowed to a mere 3 per cent for both private and government final consumption expenditure.

Looking ahead to FY25, Nageswaran anticipates further enhancements in rural income and demand, driven by anticipated improvements in value addition within the farm sector.

He stated,“With the anticipated better value addition in the farm sector next financial year, rural income and rural demand will be even better and more evident in FY25.”

Despite the optimistic outlook, Nageswaran acknowledges potential risks to growth in the coming year, particularly stemming from uncertainty surrounding merchandise trade.

The World Trade Organisation (WTO) has revised its projection for global trade growth in 2023 downward to 0.8 per cent, down from the previous estimate of 1.7 per cent in April, posing challenges to India's economic expansion plans.

(KNN Bureau)

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