Earlier this month, the RBI cut its growth forecast for the current fiscal year to 6.6 percent from 7.2 percent in June.
The government’s continued focus on infrastructure development, digitization and attracting FDI will lead to additional growth to boost overall performance. (Representative image)
Deloitte said on Sunday that the Indian economy is expected to grow at a slightly higher rate of 6.5-6.8 percent this fiscal year and 6.7-7.3 percent in fiscal 2026, boosted by increased domestic consumption.
Deloitte India Economist Rumki Majumdar said Development The first half of fiscal 2025 turned out to be slower than expected as post-election uncertainty due to heavy rains and geopolitical events hampered activity on domestic demand and exports.
However, India is showing resilience in certain pockets that are worth noting – be it in consumption trends, growth in services, increasing share of high-value manufacturing in exports, or capital markets.
Government’s continued focus on infrastructural development, digitization and attracting FDI will drive incremental growth to boost overall performance. will cause
“We are cautiously optimistic and expect growth to remain between 6.5 and 6.8 percent this fiscal and slightly higher between 6.7 and 7.3 percent in fiscal 2026,” Majumdar said. PTI.
Earlier this month, the Reserve Bank of India cut its growth forecast for the current fiscal year to 6.6 percent from 7.2 percent in June.
Deloitte said manufacturing exports in high-value segments such as electronics, semiconductors and chemicals reflect India’s strengthening position in global value chains.
Meanwhile, capital markets have shown stability despite significant FII outflows over the past two-and-a-half months, thanks to increased participation from retail and domestic institutional investors.
“We expect many of these trends to persist through 2025. We believe that domestic consumption will remain the backbone of India’s economic growth, with both rural and urban demand playing a key role.
“Many factors, such as improved farm income, targeted subsidies, social welfare programmes, government employment initiatives, progress in digitization, and strong growth of the services sector, will support broad-based consumption spending,” Majumdar said. “
India will have to get out of a rough patch, as several global headwinds pose challenges. Geopolitical tensions, trade disputes, supply chain disruptions, and the growing effects of climate change could weigh heavily on growth and long-term economic stability, he added.
Anticipated policy changes and trade restrictions in the US may affect export demand and capital flows into the country. Also, central banks in the West may not cut rates as much next year if inflation starts to head north. Tighter global liquidity is likely to limit the RBI’s ability to change monetary policy.
Majumdar said that in the next few years, India’s growth will depend on its ability to economically insulate itself from global uncertainty.
“The Indian economy has an opportunity to turn lime into lemonade by focusing on three factors. The first is to build on its strengths. Harnessing the demographic dividend and investing in the middle class through workforce development and employment. Increasing class wealth will increase consumption, reduce the skills gap, stimulate the labor market, and strengthen the capital market.”
Second, the emphasis will be on building a self-reliant manufacturing sector that will not only meet India’s growing domestic demand but also integrate with the global value chain. In addition, by advancing digitally delivered services and targeting high-value segments of global value chains, India can take advantage of opportunities, even with the trends of nearshore and de-globalization. between the
All eyes will be on the upcoming Budget which could set the tone for these priorities, outline strategic investments and policy initiatives that future-proof the workforce, give India a competitive advantage on the demographic dividend. help transform, advance self-reliance, and enhance India’s position. In manufacturing and global value chains, Majumdar added.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed. PTI)