look news india
Mumbai: In view of the reduction in capital expenditure by the central government, Goldman Sachs has marginally reduced its estimate of India's economic growth rate for the current and next year. The growth rate is estimated to be below seven percent. This reduction has come in view of the elections and weak consumer demand. Earlier, rating agency ICRA has also expressed apprehension that the GDP figures for the June quarter will be weak.
The economic growth rate (GDP) is estimated to be 6.70 percent in 2024 and 6.40 percent in 2025. The previous estimate for both years has been cut by 20 basis points.
Capital expenditure by the government declined 25 per cent year-on-year in the quarter due to the Lok Sabha elections in April-June of the current year, a Goldman report said.
Keeping in mind the government's commitment to bring down the fiscal deficit to 4.50 percent of GDP in the current financial year, the growth rate estimate for 2025 has also been reduced.
Consumption growth is likely to slow as a result of RBI-imposed regulations on unsecured lending by banks, which could also impact the growth rate.
However, reduction in interest rates by the Reserve Bank may provide some support to the GDP.
Earlier, ICRA has also estimated GDP to be 6 percent for the June quarter. ICRA has made a lower estimate keeping in mind the reduction in government expenditure and weak consumer confidence. The GDP figure in the June quarter will be at a six-quarter low.
GDP stood at 7.80 percent in the March quarter. At the same time, the Finance Ministry expects the economic growth rate to be 6.50-7 percent for the current financial year.
