Extending their support to the reforms proposed in the Economic Survey tabled by Finance Minister Nirmala Sitharaman in Parliament on Monday, industry bodies said that the pace of India’s economic growth might surpass the predictions in the document.
The survey has predicted that India is expected to grow at 6.5-7 per cent in 2024-25. It is in line with the estimates of the International Monetary Fund and the Asian Development Bank but less than the 7.2 per cent predicted by the Reserve Bank of India (RBI).
Sanjiv Puri, President, Confederation of Indian Industry (CII), said that he was “confident” that India’s gross domestic product (GDP) growth for 2024-25 would “surpass” the survey’s forecast.
“And based on certain conditions, it has the potential to be at 8 per cent,” he added.
Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry, also said, “We believe that the growth will be above such conservative estimates as 8 per cent growth is becoming a new normal for India.”
Anish Shah, President, Federation of Indian Chambers of Commerce & Industry (FICCI), called the survey “mature” for its take on the Indian economy and said that it was “time to look at the next reforms trajectory to prepare India for achieving even higher growth.”
“While a projected growth rate of 6.5-7 per cent for 2024-25 may appear a bit conservative, we feel that for a country the size of India and which has been growing at a fast pace, this growth is encouraging,” he said.
The Associated Chambers of Commerce & Industry of India (ASSOCHAM) said that the survey was a “morale-booster” to the India growth story.
“Growth is well spread across different sectors like manufacturing, real estate and construction, as pointed out by the important document presented in Parliament,” said Deepak Sood, Secretary General at ASSOCHAM.
The survey highlighted that capital expenditure by the private sector rose in 2023-24 (FY24) and that its financial performance has been good. But the hiring and compensation growth has not kept pace with it.
“Hiring and compensation growth hardly kept up with it. But, it is in the interest of the companies to step up hiring and worker compensation,” it said.
Shah said that three points in the survey merit “immediate attention.” First, the survey suggested that a higher level of private sector financing and resource mobilisation from new sources will be crucial for India to build quality infrastructure.
Second, private capital formation after good growth in the last three years may turn slightly more cautious because of fears of cheaper imports from countries that have excess capacity. Third, the need to explore whether India’s inflation targeting framework should target the inflation rate excluding food.
“FICCI concurs with all the aforementioned points and would continue to engage with the government on the same. Infrastructure development requires close coordination amongst all levels of government as there are a multitude of clearances that are needed at each level, and which are often inter-related,” he said.
“CII wholeheartedly supports the reforms agenda proposed in the Survey for the medium term and hopes that the forthcoming Budget would implement some of the measures which would help to unlock the growth potential of the Indian economy,” added Puri.
“The Indian economy has consolidated its post-Covid recovery, ensuring economic and financial stability and is on the path to Viksit Bharat by 2047,” said Agrawal.
First Published: Jul 22 2024 | 8:34 PM IS