CRISIL forecasted India's GDP to stood at 6.8 percent for FY25

The fiscal impulse will be unnoticeable because of the need to reduce the fiscal deficit to 5.1% of GDP next fiscal according to the glide path presaged. However, the nature of government spending will provide some support to the investment cycle and rural incomes.

Inflation softened this fiscal due to easing input costs and slower domestic demand, but elevated food inflation curbed a bigger decline in the headline number. We expect the softening to continue next fiscal on the back of healthier agriculture output that tames food inflation, and benign oil and commodity prices.

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Growth momentum will continue through this decade, with significant private investments in emerging sectors, continuing government spending on infrastructure buildout, ongoing reforms push, and efficiency gains from increasing digitalization and physical connectivity.

 The next seven fiscals will expect the Indian economy to cross the $5 trillion mark and reach $7 trillion at an estimated 6.7% average annual growth. By fiscal 2031, India will be the third largest economy and an upper middle-income country, which will be a big positive for domestic consumption. India’s manufacturing sector is in a modernizing mode due to high capacity utilization across key sectors, opportunities from global supply-chain diversification, thrust on infrastructure investment, the green-transition imperative, and strong balance sheets of lenders. Continuous reforms enhanced global competitiveness, and moving up the value chain will boost the share of manufacturing in India’s GDP beyond the projected 20% in fiscal 2031.”

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