India's Economic Growth Projection

The Indian economy is set to grow at a rate of 6.5% in the fiscal year starting April 1, according to the latest EY Economy Watch report. This growth is supported by a well-calibrated fiscal strategy focusing on human capital development and fiscal prudence.

FY25 and Beyond

For FY25, the report projects a real GDP growth of 6.4%, with a slight increase to 6.5% in FY26. The need for realigning fiscal policy to support India's journey toward Viksit Bharat is emphasized.

Challenges and Opportunities

Achieving these growth rates requires significant increases in private final consumption expenditure or investment expenditure, particularly in government capital expenditure. The report also highlights the importance of increasing investments in education and healthcare to sustain long-term growth.

Fiscal Strategies for Growth

The EY India report suggests a phased approach to fiscal restructuring, aiming to increase the revenue-to-GDP ratio and government spending on health, education, and infrastructure. Equalization transfers are proposed as a means to bridge regional disparities and ensure adequate funding for social sector investments.