Strong growth likely in FY25; pvt investment picking up, says Sanjay Nayar

economictimes.indiatimes.com:

India is in a «great spot» and could realise a growth rate of about 7.6% or more in 2024-25, said Sanjay Nayar, the new president of the Associated Chambers of Commerce and Industry of India (Assocham). However, a lot hinges on the monsoon rains and global inflation, which influences the interest rate regime, he said. The National Statistical Office, in its second advance estimate, pegged the country's 2023-24 growth at 7.6%, which Nayar said was «like hitting the ball out of the park» given the global turmoil.

In an interview to ET, Nayar called on the government to maintain its capital expenditure push for some more time to «crowd in» private investment.

Rural consumption has started to see an uptick, on top of the already strong urban demand, he said. Capacity utilisation has gone up to 75% or so, which indicates companies would go for fresh capacity expansion. «There is demand across segments — we see various airlines ordering more aircraft.

So, if the consumption story remains strong, services and manufacturing will continue to get a boost, and the supply side will expand, too,» Nayar said.

«Investment is picking up in sectors like hospitality and fintech, among others. I think there is much more scope for private investments to increase further,» he added. Generating jobs is critical, he said, but «it can't be driven solely by any particular scheme».

«It's got to be driven by crowding in private investment and private savings,» he added. The Assocham president said he expects foreign direct investment (FDI) to bounce back once the general election is over. FDI equity inflows fell 13% in the first three quarters of 2023-24 from a year before to $32.04 billion.