GDP Expected To Grow By 8% In FY25: CII

The Confederation of Indian Industry (CII) has forecasted a 8 per cent growth in India's GDP for the fiscal year 2024-25, driven by advancements in the agriculture and services sectors, as well as increased public expenditure. 

According to CII President Sanjiv Puri, the ongoing momentum in public capital expenditure is expected to enhance both physical and digital infrastructure, providing a strong foundation for economic expansion.

The agriculture sector is projected to grow at 3.7 per cent this fiscal year, a considerable improvement from last year's 1.4 per cent. The services sector is also expected to see growth, with projections of a 9 per cent increase compared to 7.9 per cent in the previous year. 

However, the industry sector's growth is anticipated to moderate to 8.4 per cent, slightly lower than last year's 9.3 per cent, primarily due to a higher base effect.

Puri said that various policy interventions aimed at enhancing the ease of doing business have laid a solid groundwork for growth. Additionally, an expected improvement in global trade is set to further bolster the economy. The forecast of above-normal monsoon rains this year is likely to lead to better agricultural production, although weather remains a variable risk.

Strong domestic demand is evidenced by rising sales in passenger vehicles and increased airline and rail traffic. Public investment in physical infrastructure is estimated at Rs 5.25 lakh crore, up from Rs 5.06 lakh crore as quoted in the Union Budget. 

To sustain this growth trajectory, the CII has recommended a 25 per cent increase in capital expenditure for FY25 over the revised estimate for FY24.

The industry body also suggested a roadmap to raise public expenditure on education to 6 per cent of GDP and on healthcare to 3 per cent. 

In terms of financial sector reforms, the CII advocated for the privatisation of public sector banks, diversification of funding sources for non-banking financial companies, and rationalisation of tax deducted at source provisions. They proposed reducing the number of TDS rates and establishing consistency in capital gains tax rates and holding periods across various instruments.