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India's GDP Growth At 6.3-6.8%: Economic Survey

India's GDP Growth At 6.3-6.8%: Economic Survey

The Indian economy is expected to expand at a rate of 6.3-6.8% in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25 presented in Parliament by Finance Minister Nirmala Sitharaman. The report highlights strong economic fundamentals, a declining unemployment rate, and stable inflation while calling for further reforms to sustain long-term growth.

“The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation, and stable private consumption,” the Survey noted.

If realized, this would be the slowest growth rate since 2020-21, when India’s GDP contracted by 5.8% due to the pandemic. The economy rebounded with 9.7% growth in 2021-22, followed by 7% in 2022-23 and 8.2% in the previous fiscal year.

While food inflation is expected to soften in Q4 FY25 with seasonal easing of vegetable prices and Kharif harvest arrivals, global uncertainties remain a challenge. The Survey warns that geopolitical tensions, trade disruptions, and elevated commodity prices could impact growth.

To sustain economic momentum, India must focus on structural reforms, deregulation, and strengthening its global competitiveness. The Survey also highlights the need for strategic policy management to navigate external risks and enhance domestic resilience.

On financial markets, the Survey points out concerns regarding liquidity constraints in the corporate bond market and suggests addressing entry costs, information asymmetry, and the lack of a secondary market. Additionally, it notes that the rupee’s depreciation in 2024 was driven by a strong US dollar amid geopolitical uncertainties and the upcoming US elections.

With the rising participation of retail investors, a potential market correction in 2025 could have broader economic implications. The Survey underscores the importance of a well-governed AI framework to prevent misuse and enhance economic efficiency.

India's GDP Growth At 6.3-6.8%: Economic Survey

India's GDP Growth At 6.3-6.8%: Economic Survey

The Indian economy is expected to expand at a rate of 6.3-6.8% in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25 presented in Parliament by Finance Minister Nirmala Sitharaman. The report highlights strong economic fundamentals, a declining unemployment rate, and stable inflation while calling for further reforms to sustain long-term growth.

“The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation, and stable private consumption,” the Survey noted.

If realized, this would be the slowest growth rate since 2020-21, when India’s GDP contracted by 5.8% due to the pandemic. The economy rebounded with 9.7% growth in 2021-22, followed by 7% in 2022-23 and 8.2% in the previous fiscal year.

While food inflation is expected to soften in Q4 FY25 with seasonal easing of vegetable prices and Kharif harvest arrivals, global uncertainties remain a challenge. The Survey warns that geopolitical tensions, trade disruptions, and elevated commodity prices could impact growth.

To sustain economic momentum, India must focus on structural reforms, deregulation, and strengthening its global competitiveness. The Survey also highlights the need for strategic policy management to navigate external risks and enhance domestic resilience.

On financial markets, the Survey points out concerns regarding liquidity constraints in the corporate bond market and suggests addressing entry costs, information asymmetry, and the lack of a secondary market. Additionally, it notes that the rupee’s depreciation in 2024 was driven by a strong US dollar amid geopolitical uncertainties and the upcoming US elections.

With the rising participation of retail investors, a potential market correction in 2025 could have broader economic implications. The Survey underscores the importance of a well-governed AI framework to prevent misuse and enhance economic efficiency.

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