India to grow 6.8% in FY25, become upper-middle-income economy by FY31: Crisil
₹98,374, or $1,183, in FY23. Despite its FY25 growth forecast being slightly below the RBI's 7% projection, Crisil maintained that India will remain the world's fastest-growing major economy.
"The fiscal impulse will be lesser because of the need to reduce the fiscal deficit to 5.1% of GDP next fiscal according to the glide path presaged," the rating agency said. “However, the nature of government spending will provide some support to the investment cycle and rural incomes." In the December quarter, the Indian economy soared ahead with a surprise growth of 8.4%, belying fears of tempering as the manufacturing, electricity and construction sectors put up a robust show.
The higher-than-expected growth recorded during the quarter led to the statistics ministry to raise its GDP growth estimate for FY24 to 7.6% in its second revised estimate, up from 7.3% in its first advance forecast. Key sectors like mining, manufacturing, construction, and services are driving the India's economic expansion this year.
Crisil also foresees a dip in inflation in the next fiscal year, driven by reduced input costs, subdued domestic demand, improved agricultural production, and stable oil and commodity prices. Recent government data revealed that January saw consumer price index-based retail inflation dropped to a three-month low of 5.1%, helped by a slower rise in prices of food item.
While retail inflation remains above the RBI's 4% goal, it has stayed within the 2-6% tolerance range for five consecutive months. The agency expects India's growth momentum to persist throughout the decade, fuelled by significant private sector investments in new industries, consistent government infrastructure spending, ongoing reforms, and the benefits of
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