Indian economy likely to grow higher than 7% in current fiscal amid normal monsoon: NCAER

30 Jul 2024 Evaluate

Expressing optimism over India’s growth, economic think tank National Council of Applied Economic Research (NCAER), in its July 2024 issue of Monthly Economic Review (MER), has said that the Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty. It added real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand.

NCAER director general Poonam Gupta said ‘Based on the momentum in the high-frequency indicators, normalised monsoon, a relatively benign global outlook and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 per cent, and possibly closer to 7.5 per cent’. Gupta said the Union Budget 2024-25 lived up to the expectations of unwavering commitment to fiscal consolidation, prudence, and quality. The Budget has kept the fiscal deficit target at 4.9 per cent of GDP and capital expenditure at 2.4 per cent of GDP during 2024-25.

According to the NCAER, the short to medium-term growth strategy is based on six key areas -- private sector capital formation, green transition financing, MSME development, agricultural transformation, Education and skill development, and enhanced state capacity. The NCAER-NSE business confidence index (BCI) increased to 149.8 in the first quarter (Q1) of FY25, up from 138.2 in the fourth quarter (Q4) of FY24, indicating an improvement in business sentiments.