According to the FICCI’s ‘Economic Outlook Survey’ results, GDP growth is pegged at 6.8% for the first quarter of the current fiscal year.
The survey expects the government to stick to fiscal prudence ensuring macro stability.
However, at the same time, the government can leverage additional resources from robust tax collections and Reserve Bank’ s record dividend transfer.
“This fiscal headroom could be used to increase the spend on social sector schemes especially to support the rural economy. Furthermore, subsidy estimates are anticipated to remain stable, reflecting a focus on targeted benefit delivery,” the survey states.
Robust economy
Industry and services sectors are expected to grow by 6.7% and 7.4%, respectively, in FY25, according to the survey. The survey forecast agriculture and allied activities to grow at 3.7% for the current fiscal, up from 1.4% growth in the previous fiscal on account of waning El Nino and a normal southwest monsoon.It said growth in the agriculture sector and easing inflation are also likely to positively affect consumption.According to the survey, Consumer Price Index based inflation will likely hover between 4.4% and 5% in 2024-25, but food prices, including that of cereals, fruits, and milk products may push up the inflation levels.
“Food prices remain high and sticky with inflation inching up in cereals, fruits, and milk products. Also, pulses and vegetables segments maintained double-digit inflation levels,” states the survey.
Further, the survey forecasts the policy repo rate to moderate to 6% by the end of the current fiscal, “with a minimum and maximum range of 5.5% and 6.25% respectively.”
Investments will likely remain robust owing to continued momentum in the government capital expenditure and crowding-in of private investments, it said.
The survey projects exports of $ 455 billion and imports of $ 725 billion in 2024-25, with the current account deficit pegged at 1% of GDP.
