Business News / Good news for economy - India's economic pace can remain this much this year

Vikrant Shekhawat : May 07, 2024, 08:32 AM
Business News: Far from matching the economic pace that India has achieved since Covid, it is proving difficult for all the big countries of the world to even come close to it. Be it China or America or any other country in Europe. I am convinced of India's speed. The country's growth rate was seen at 7.6 percent in the financial year 2024. The growth that has been estimated for the current financial year is also more than 7 percent and is seen to be higher than other big countries of the world. India Rating and Research has increased the estimate of India's economic growth to above 7 percent. Let us also tell you what has been estimated by India Ratings.

Increased the estimate

India Ratings and Research increased the estimate of the country's gross domestic product (GDP) growth rate for the financial year 2024-25 from 6.5 percent to 7.1 percent. This estimate is slightly higher than the Reserve Bank's estimate of seven percent. The domestic rating agency said in a statement that sustained government capital expenditure, reduced credit on the books of the corporate and banking sectors and strong support from initial private corporate capital expenditure have forced it to revise its growth forecast.

There are obstacles ahead

Along with this, the rating agency said that lack of broad base of consumption demand and obstacles in exports due to slow growth at the global level can limit India's GDP growth. The agency expected that the growth in private final consumption expenditure will increase to seven percent in the financial year 2024-25, which was three percent in the financial year 2023-24. This will be the highest level in three years.

Rural consumption weak

The report describes the current consumption demand as highly skewed, saying that it is driven by large-scale consumption of goods and services by households belonging to the high income category, while rural consumption remains weak. India Ratings said that due to a better than normal monsoon, government procurement of wheat could increase to 37 million tonnes in the current financial year. In the last financial year, wheat procurement was 2.6 crore tonnes.

Estimates from foreign agencies

If we talk about the estimates of foreign agencies, then their confidence in India's economy has increased. Last month, the IMF increased its estimate to 6.8 percent growth for the financial year 2025, which was earlier 6.5 percent. S&P Global had raised India's FY2025 growth forecast to 6.8 percent from the estimated 6.4 percent in November. Asian Development Bank (ADB) has also increased India's GDP growth forecast for fiscal year 2025 to 7 percent from the earlier estimated 6.7 percent. The World Bank has also revised its forecast of India's GDP growth for fiscal year 2025 to 6.6 percent, from the earlier estimate of 6.4 percent for the fiscal year.