Confederation of Indian Industry estimates FY25 GDP growth at 8%, says key sectors performing well

NEW DELHI: The Confederation of Indian Industry (CII) has estimated that India’s gross domestic product (GDP) will grow by 8% in fiscal 2024-25, Sanjiv Puri, newly elected president of CII, said on Thursday.

Puri’s optimism stems from his belief that all key sectors of the economy – manufacturing, agriculture and services – will register healthy growth this year on the back of continued reforms, adequate public spending and favorable monsoons and other green shoots.

CII’s GDP growth projection is much higher than most economists forecast. For example, the World Bank on Tuesday maintained its GDP growth forecast for India at 6.6% for FY25. The International Monetary Fund (IMF) recently raised its economic growth forecast for India for FY25 to 6.8%, while the Asian The Development Bank (ADB) had forecast growth of 7% for the financial year.

“The growth rate is expected to reach 8% this year, marking the fourth consecutive year of growth above 7%…Growth estimates are largely based on prioritizing addressing the unfinished reform agenda, as well as improving global trade prospects which are helping our exports , good investment and consumption performance and expectations of a normal monsoon,” said Puri, who is also the chairman of ITC, a Kolkata-based hotel and cigarette conglomerate.

He estimated that the agriculture sector, based on above-average monsoon forecasts, is expected to grow by 3.7% compared to 1.4% last year. However, growth in the manufacturing sector is likely to decelerate from 9.3% in FY24 to 8.4% in FY25 due to the high base effect. For the services sector, Puri estimates growth of 9% year-on-year compared to 7.9% growth last fiscal.

The industry body said the next set of GST reforms should bring the tax rate to a three-tier structure with moderate rates. CII is also seeking to bring petroleum products, electricity and real estate under the ambit of GST.