With significant investments in sectors such as railways, defence, power, and data centres already showing positive momentum, the 2024-25 Union Budget’s allocation of Rs 11.1 trillion for infrastructure is expected to increase in the upcoming 2025-26 budget. This surge in investment will serve as a catalyst to stimulate demand and sustain long-term economic growth, particularly as inflation eases.
Boost to Sectors from Healthcare to Tourism
Additional sectors, including healthcare, tourism, discretionary consumption, and financial services, are poised to benefit from the economic recovery. Industrial growth has shown encouraging signs, with November 2024 witnessing a 6-month high growth rate of 5.2%, significantly higher than the 2.5% recorded in November 2023.
Manufacturing Sector Records Strong Growth
The manufacturing sector, which constitutes over 75% of the Index of Industrial Production IIP, recorded a growth rate of 5.8% in November 2024 compared to 4.1% in October. This growth is expected to contribute significantly to employment creation, especially for young graduates from engineering institutes and universities.
Capital Goods, Consumer Durables Drive Growth
The production of capital goods, a key indicator of real investment, surged by 9% in November 2024, reflecting robust economic activity. Additionally, the consumer durables segment, including electronic goods, refrigerators, and televisions, registered a remarkable 13.1% growth, signalling higher consumer demand driven by rising incomes.
Anticipated Growth-Driven Focus in Upcoming Budget
With an anticipated growth-driven focus in the upcoming budget, India’s economic revival appears poised to gather further momentum, supporting industrial expansion, job creation, and increased consumer spending. As the country’s industrial growth shows encouraging signs, investors and businesses can be expected to benefit from this sustained economic growth in the coming years.
