India’s GDP to grow at 8% in FY25: CII

India’s economy will grow at 8 per cent in the fiscal year 2024-’25 (FY25), estimates Confederation of Indian Industry, or CII, according to the industry body’s newly-elected president Sanjiv Puri.

While this would be the fourth year in a row that the GDP growth rate would stay above 7 per cent, the CII estimate is significantly greater than the Reserve Bank of India’s growth projection of 7.2 per cent for FY25.

The CII projects India’s farm sector output to grow at 3.7 per cent in FY25. The figure stood at 1.4 per cent in FY24. Services can be expected to surge at 9 per cent in FY25 compared to 7.9 per cent in the previous fiscal year. Growth rate in the manufacturing sector is likely to drop from 9.3 per cent in the previous fiscal to 8.4 per cent in FY25. Addressing the media in his first press conference since taking over as CII president, Puri said overall growth across all sectors would remain steady.

“The growth estimate hinges critically on addressing the unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well, and expectations of a normal monsoon, among other factors,” said a CII statement quoting Puri, who is also managing director and chairman of the Kolkata-headquartered conglomerate ITC Limited.

“The stellar growth performance, expected during the current fiscal, is propelled by six growth drivers which have pivoted the economy to an accelerator mode,” Puri said, according to the CII statement. The factors include a well-capitalised banking system, a booming capital market, public investment in digital as well as physical infrastructure, private sector investment in India’s growth and less dependence on oil, he added.

Puri advocated continuation of tax reforms in order to bolster investment and economic competitiveness. He added that the government could consider simplifying issues related to tax deducted at source (TDS) and capital gains tax.

The CII also expects petroleum products, real estate and electricity to come under the GST purview, and predicts upcoming GST reforms to take the tax rate below the three-rate structure.