The Indian economy may experience another year of 7% real growth in fiscal 2025, according to a government review.
The country can also aspire to become a $7 trillion economy in the next six to seven years given the reforms and measures implemented by the government over the last 10 years, the ministry said in its report, "Indian Economy—A Review," prepared by Chief Economic Adviser V Anantha Nageswaran's office.
"...Under a reasonable set of assumptions with respect to the inflation differentials and the exchange rate, India can aspire to become a $7 trillion economy in the next six to seven years (by 2030)," the review said. Such growth would be a significant milestone in the journey to delivering a quality of life and standard of living that match and exceed the aspirations of the Indian people, it said.
The Indian Economic Review, as of January 2024, is not the government's annual economic survey, which is usually presented at this time. But it bears much optimism regarding the growth potential of the country until the end of the decade.
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Why Real Growth Seen At 7% In FY25
The predictions of real growth for FY25 come on the back of expectations that FY24 will close on 7% overall growth, the review showed. Real GDP in the second quarter of FY24 was estimated at 7.6%, compared to 6.2% in Q2 FY23, beating expectations. Shortly after, the Reserve Bank of India revised India's GDP growth target to 7% in FY24 from its earlier forecast of 6.5%, boosting confidence in the country's growth.
The review credits the robustness seen in domestic demand, namely, private consumption and investment, to the reforms and measures implemented by the government over the last 10 years.
"(It is) possible for the Indian economy to grow in the coming years at a rate above 7% on the strength of the financial sector and other recent and future structural reforms," the review said.
There is considerable scope for the growth rate to rise well above 7% by 2030, it said. However, the only concern cited by the ministry is the elevated risk of geopolitical conflicts.
"...priority areas for future reforms include skilling, learning outcomes, health, energy security, a reduction in compliance burden for MSMEs, and gender balancing in the labour force."
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