India Ratings & Research (Ind-Ra) increased its estimate of GDP growth for 2024–25 from 7.1% to 7.5% because it anticipates the Union Budget will boost the country’s economy even more.
The paper claims that the Union Budget now supports the continuous growth momentum driven by government capital expenditures, stronger bank balance sheets, and an emerging private business capital expenditure cycle.
The budget intends to encourage the development of jobs in the economy, enhance loan delivery to MSMEs, and increase expenditure in the agricultural and rural sectors.
Ind-Ra anticipates that the above-average monsoon and the initiatives unveiled in the Union Budget for FY25 will increase demand for goods and services that are used by lower-class and rural households.
“Ind-Ra believes these measures would help in broad-basing the consumption demand,” said the report.
Private Final Consumption Expenditure (PFCE) is expected to increase from 4% in FY24 to a three-year high of 7.4% in FY25, according to Ind-Ra.
Although there is a risk of food inflation, the research anticipates lower average retail inflation in the current fiscal year than in the last one, which will sustain real wage growth.
The Indian economy is expected to develop at a rate of 7.2%, according to RBI projections, and between 6.5-7%, according to Economic Survey estimates.
Anantha Nageswaran, India’s chief economic advisor, asserted that 7% GDP growth “is doable” for the country even though the international climate has grown more difficult since the year’s beginning.
As we wrote the interim Economic Survey in January, we were more optimistic about a 7% GDP increase. Since then, there has been even more division in the world environment. Since we believe that 7% is manageable, we still want to exercise caution, but with moderation,” he continued.
