Revised Economic Forecast by FICCI

The Federation of Indian Chambers of Commerce and Industry (FICCI) has updated its economic outlook for India, revising the GDP growth forecast to 6.4% for the financial year 2024-25. This adjustment reflects a significant reduction from the previous estimate of 7.0% in September 2024, despite a robust GDP growth of 8.2% recorded for the year 2023-2024.

Sector-Wise Growth Projections

Consumer spending is anticipated to rise, bolstered by positive developments in agriculture and rural consumption. The agricultural sector, along with allied activities, is expected to grow by 3.6% in FY 2024-25. Meanwhile, the industrial and services sectors are projected to expand by 6.3% and 7.3%, respectively. Economic activities are likely to accelerate in the latter half of the fiscal year, driven by increased public capital expenditure, festive demand, and the normalization of industrial activities post-monsoon.

Inflation and Foreign Investment

Inflation is forecasted to ease, with the consumer price index (CPI)-based inflation expected to be at 4.8% for 2024-25, in line with the Reserve Bank of India's (RBI) projections. The report also emphasizes the potential for attracting foreign direct investment, particularly in manufacturing, electronics, and pharmaceuticals, as global supply chains diversify away from China.

Looking Ahead to Budget 2025

With the Union budget 2025-26 on the horizon, economists are advocating for measures to revive private consumption, review tax structures to enhance disposable income, and increase investments in agriculture and rural infrastructure. The focus is also on managing inflation, improving productivity, and leveraging emerging opportunities in electronics and renewable energy sectors to ensure sustained economic growth.