India’s finance ministry anticipates economic growth exceeding the central bank’s 7% projection for FY24, and estimates growth close to 7% in the following year, FY25. Despite geopolitical risks that could lead to supply chain disruptions and inflation, the ministry remains optimistic about India’s growth trajectory.
The International Monetary Fund and the World Bank predict FY25 GDP growth in the range of 6.3-6.4%. The monthly economic review suggests that, under reasonable assumptions, India could aspire to become a $7 trillion economy by 2030, aiming to reach $5 trillion in the next three years.
The chief economic adviser in the finance ministry, V. Anantha Nageswaran, and his team believe that India’s upward growth trajectory will continue due to stable domestic demand, expanding private consumption and investments, and ongoing structural reforms.
The ministry highlights priority areas for future reforms, including skilling, learning outcomes, health, energy security, reducing compliance burdens for small businesses, and gender balancing in the labor force. Experts, such as economist Pronab Sen, believe a 7% growth target for FY25 is achievable if the government can prevent rupee depreciation, stabilize the exchange rate, and improve rural consumption. The ministry encourages purposeful and fruitful reforms with the full participation of state governments and expresses confidence in India’s ability to face global challenges.
The growth estimates for FY25 come ahead of the government’s budget presentation, and India is expected to remain the fastest-growing major global economy, on track to become the world’s third-largest economy by 2030, according to S&P Global. The strength in India’s financial sector and recent structural reforms are seen as contributing factors to the country’s resilience and potential for growth.
Repurposed article originally published in the Mint