India set for 7% growth in FY25 despite global challenges
What's the story
Deloitte South Asia's CEO, Romal Shetty, has projected a promising economic outlook for India in the current fiscal year (FY). Despite global challenges, the country is expected to achieve a growth rate of 7%. This forecast comes amid an otherwise bleak international economic scenario. Shetty highlighted that inflation is reasonably under control and there has been an increase in rural demand and vehicle sales.
Resilience
India's economic resilience amid global uncertainties
Shetty emphasized that despite global uncertainties, India remains resilient. He stated, "We believe that we would be in the 7-7.1% range in terms of the growth (this fiscal year)." However, he also acknowledged that geopolitical crises in regions like the Middle East and Ukraine, as well as a slowdown in Western economies, could impact India's GDP growth.
Forecast
Deloitte's growth forecast for next FY
Deloitte has also provided a growth forecast for the next FY (2025-26), predicting a rate of 6.7%. This follows an impressive economic performance in the previous FY (2023-24) when the Indian economy grew by 8.2%. Shetty expressed confidence in the current government's commitment to economic reforms and privatization, noting a significant push within government departments to achieve these goals.
Economic expansion
India's journey to become a $5 trillion economy
India, currently the world's fifth-largest economy, is on track to expand to $5 trillion and become the third-largest within this decade. Shetty highlighted that the decline in oil prices and US Fed rate cut could be beneficial for India as it imports a significant amount of goods. He also emphasized the need for technological integration in agriculture and identifying niche areas where India can dominate globally.
Development outlook
Views on India's path to developed nation status
When asked by PTI about India's potential to achieve developed nation status by 2047, Shetty suggested that per capita income needs to rise from the current $2,500 to $20,000. He believes that once per capita income reaches $5,000, consumer spending will significantly increase leading to a more self-reliant economy. This shift could potentially accelerate India's growth and change the shape of its economy.