look news india
New Delhi: India's gross domestic product (GDP) may grow less than 7% in the current fiscal year due to external developments, high base impact and technical factors, economists said.
On Friday, the Reserve Bank of India raised India's GDP growth forecast for FY25 by 20 basis points to 7.2%.
Most economists in ten believe GDP growth will remain below 7% in FY25, with some even estimating it to be as low as 6.5%.
We expect GDP growth to be 6.5% in the current fiscal year, although it could rise slightly if growth in net indirect taxes does not slow as we expect, the economists said. It expects gross value added to grow at 6.8% in FY25 and GDP growth is likely to moderate against the backdrop of an 'unfavourable base' and subsidy bill stabilising at a low level.
In FY24, the country's gross-value-added grew by 7.2%, while GDP grew by 8.2%. The 100 bps difference between the two was mainly a result of higher indirect tax collections and a significant reduction in subsidy expenditure compared to previous years. In FY24, subsidy expenditure declined by 22% year-on-year.
Moreover, the lower deflator also boosted real growth in FY24, which may not happen in the current fiscal, economists said.
