cii-projects-8-economic-growth-for-2024-25

The Confederation of Indian Industry (CII) anticipates that India's economy will grow by 8% in the fiscal year 2024-25, driven by improved agricultural performance and increased private investment, according to Sanjiv Puri, the newly elected President of the apex industry body.

 

Puri, who also serves as the Chairman of ITC, highlighted that the agricultural sector, previously impacted by erratic weather, is expected to recover with the forecast of a normal monsoon this year. This recovery is projected to boost rural consumption and, consequently, economic growth.

 

CII’s optimistic projection follows the Reserve Bank of India's (RBI) recent upgrade of its GDP growth estimate to 7.2%.

 

“The growth estimate hinges critically on addressing the unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well, and expectations of a normal monsoon, among other factors,” Puri stated in a CII release.

 

According to CII’s forecast, the agricultural sector's output is likely to grow by 3.7% in FY25, up from 1.4% in FY24. The industry sector is expected to grow by 8.4%, compared to 9.3% the previous year, while the services sector is projected to expand by 9%, up from 7.9% in the year ending March 2024.

 

“The stellar growth performance expected during the current fiscal is propelled by six growth drivers which have pivoted the economy to an accelerator mode,” Puri remarked.

 

These growth drivers include increased private sector investment in India's growth story, substantial public investment in physical and digital infrastructure, a well-capitalised banking system, a booming capital market, and reduced dependence on oil.

 

CII's business confidence survey for January-March 2024 revealed that three-quarters of the over 200 respondents anticipated an improvement in private capital expenditure in the first half of the current fiscal year compared to the same period a year ago.

 

Gross fixed capital formation, representing investments in plant and machinery by the private sector, was 23.8% of nominal GDP in FY23, surpassing the levels seen in the pre-pandemic years of FY19 and FY20.

 

Infrastructure-related sectors such as cement and steel, along with electronic production, food processing, telecom benefiting from government production-linked incentives, logistics, renewable energy, automobiles, and semiconductors, are experiencing increased private investment, Puri added.