The Finance Ministry has expressed confidence in its monthly review that India’s economy will grow at a rate of about 6.5 percent in the financial year 2025. It also highlights the importance of improving India’s fiscal responsibility framework to achieve the goal of developed India by FY 2047-48. The Finance Ministry has said in its monthly review estimate that rural demand remains resilient. This is reflected in the growth of 23.2 per cent and 9.8 per cent respectively in two-wheeler and 3-wheeler vehicle sales and domestic tractor sales in October-November 2024.
Urban demand is increasing – Finance Ministry
The Finance Ministry also said that urban demand is increasing, with passenger vehicle sales growing 13.4 per cent year-on-year in October-November 2024 and strong growth in domestic air passenger traffic. As a result, the Finance Ministry has expressed hope that the economy will grow at a real rate of around 6.5 per cent in FY 2025-26.
In the second quarter of the current financial year 2024-25, July-September, the GDP growth rate had come down to a seven-quarter low of 5.4 per cent. In the previous quarter, the economic growth rate was 6.7 per cent. Due to this, the estimated growth rate figures for the coming quarters are important.
Earlier yesterday, EY’s report came out which said that the Indian economy is likely to grow at a rate of 6.5 per cent in the current and next financial year. In the September quarter, the country’s economic growth rate has been much lower than expected i.e. 5.4 per cent. The reason for this is the decline in private consumption expenditure and gross fixed capital formation.
The report said that GDP is estimated to be 5.4 percent in the second quarter of FY 2024-25, which is the lowest level in seven quarters. Apart from the fact that private investment demand has not picked up, the growth of government investment expenditure has been negative. It has declined by 15.4 percent in the first half of the current financial year
In ‘EY Economy Watch December’ 2024, India’s economic growth rate has been estimated to be 6.5 percent for FY 2024-25 (April 2024 to March 2024 financial year) and FY 2025-26.
It said that a recombined approach is important for sustainable debt management, eliminating government savings and promoting investment-led growth, which will pave the way for India to transform into a developed economy.
