India’s Economic Growth Outlook for 2024-25
India’s GDP is expected to grow by 7.0% to 7.2% in the fiscal year 2024-25, according to Deloitte India’s Economy Outlook for October 2024. Despite a slowdown in the April-to-June quarter, where GDP grew by 6.7%, India remains one of the fastest-growing major economies.
Factors Driving Growth
Positive domestic factors such as strong manufacturing, stable oil prices, and potential U.S. monetary easing are expected to support growth. The Reserve Bank of India (RBI) maintains a GDP growth projection of 7.2% for FY25.
Expert Insights
Dr. Rumki Majumdar from Deloitte highlights moderating inflation, better rainfall, and increased government spending as key growth drivers. She also notes that higher capital inflows could lead to long-term investments and job opportunities.
Employment Trends
Employment demand under the MGNREGA scheme has decreased, indicating better job opportunities elsewhere. The latest data shows a recovery in employment, especially in construction, supported by government initiatives like the National Infrastructure Pipeline.
Manufacturing and services sectors have seen modest employment improvements, aided by production-linked incentive schemes. Female labor force participation has significantly increased, particularly in rural areas.
Challenges and Future Prospects
Challenges include a high share of informal employment and the need for more formal, high-quality jobs. Future job growth is expected in emerging industries like semiconductors and clean energy, requiring specialized skills.
Deloitte remains optimistic about India’s growth prospects, driven by a thriving manufacturing sector, stable oil prices, and potential U.S. monetary policy easing.
Doubts Revealed
GDP -: GDP stands for Gross Domestic Product. It is the total value of all goods and services produced in a country in a year. It helps us understand how well a country’s economy is doing.
FY 2024-25 -: FY stands for Fiscal Year, which is a one-year period that governments use for accounting and budget purposes. In India, the fiscal year starts on April 1 and ends on March 31 of the next year. So, FY 2024-25 means from April 1, 2024, to March 31, 2025.
Manufacturing -: Manufacturing is the process of making products, especially in large quantities, using machines. It is an important part of the economy because it creates jobs and products that people use every day.
Stable oil prices -: Stable oil prices mean that the cost of oil is not changing much over time. This is important because oil is used for many things, like fuel for cars and factories, and stable prices help keep other costs steady too.
Informal employment -: Informal employment refers to jobs that are not officially registered or regulated by the government. These jobs often do not provide benefits like health insurance or job security.
Semiconductors -: Semiconductors are materials used to make electronic devices like computers and smartphones. They are important for technology and are a growing industry in India.
Clean energy -: Clean energy is energy that comes from natural sources that do not pollute the environment, like solar or wind power. It is important for reducing pollution and fighting climate change.
Deloitte -: Deloitte is a large company that provides services like consulting and financial advice to businesses. They often study and report on economic trends and forecasts.