Deloitte Retains India’s Growth Forecast at 7-7.2% for FY 2024-25
Deloitte India has maintained its growth forecast for India at 7-7.2% for the fiscal year 2024-25. This follows the economy’s expansion of 8.2% in FY 2024. The company has attributed this positive growth to various domestic factors, including moderating inflation, improved rainfall and record Kharif production, increased government spending, and rising manufacturing investments. These factors are expected to have a significant impact on India’s economic outlook.
Potential Impact of Capital Inflows and Global Economic Recovery
Rumki Majumdar, an Economist at Deloitte India, has highlighted the potential long-term investment opportunities and job creation that could result from higher capital inflows following the US Federal Reserve’s interest rate cuts. Multinational companies seeking to reduce operational costs globally could view India as an attractive investment destination. However, Majumdar cautioned that India’s exports and economic prospects for the upcoming fiscal year might be affected by a globally tempered growth outlook and delayed recovery in Western economies. Deloitte’s projections expect growth for FY 2026 to remain within the range of 6.5-6.8%.
The Importance of Job Creation and Positive Signs
Deloitte’s report emphasizes that job creation is crucial for ensuring stable household incomes. Recent employment data indicates promising signs in this regard. The report highlights a decline in the ’employment demanded’ on a 12-month moving average basis for the MGNREGA scheme, which provides temporary employment to individuals with limited or no other stable income options. This decline suggests that individuals are securing better-paying job opportunities elsewhere.
Growth in Manufacturing and Emerging Industries
Deloitte identifies the need for a greater number of formal, quality jobs in India forfair and equitable income distribution. The growth in manufacturing and emerging industries, such as semiconductors and electronics, is expected to create employment opportunities requiring advanced skill sets. The report also highlights a modest improvement in employment shares within the manufacturing and services sectors. The highest job growth occurs in the “other services” category, which encompasses businesses and professional services. Additionally, the share of salaried employees, which declined during the pandemic, is also on the rise.
The Potential of Clean Energy and Skill Development
Deloitte predicts that India’s focus on clean-energy alternatives has the potential to generate green jobs across various sectors, including energy, agriculture, tourism, and transport. It also emphasizes that India’s youthful and ambitious population offers significant potential for benefiting from the government’s recent initiatives in skill development.
Taking Estimates in Consideration
The growth forecast retained by Deloitte India maintains a positive outlook for India’s economy in the current fiscal year. The domestic factors identified by the company, coupled with potential investments from multinational companies and advancements in various sectors, bode well for economic growth and job creation in the country. However, external challenges, such as a tempered global growth outlook, may warrant closely monitoring the situation. Overall, the economic indicators and trends discussed by Deloitte suggest a promising future for India’s development and progress in the coming years.
