FICCI Forecasts 7% GDP Growth for 2024-25, Calls for Focus on Taxation Reforms and Employment Generation
New Delhi, renowned industry chamber FICCI unveiled its annual economic outlook on Thursday, projecting a median GDP growth rate of 7% for the fiscal year 2024-25. Emphasizing key sectors like taxation reforms, employment generation, innovation, and sustainable development, FICCI highlighted crucial insights from its ‘Economic Outlook Survey.’
The survey anticipates a median GDP growth of 6.8% in Q1 and 7.2% in Q2 of 2024-25, signaling robust economic expansion. Agriculture and allied activities are predicted to grow by 3.7%, buoyed by favorable monsoon forecasts following the waning effects of El Nino.
In contrast, the industry and services sectors are forecasted to achieve growth rates of 6.7% and 7.4%, respectively, in the upcoming fiscal year, underscoring their pivotal role in driving economic recovery.
Regarding inflation, the median forecast based on CPI stands at 4.5% for 2023-24, with expectations of easing food prices in the latter half of the year as kharif produce enters the market.
Economists participating in the survey anticipate a reduction in the policy repo rate to 6% by March 2025, citing favorable fiscal management and robust tax collections as supportive factors.
The report also advocates for prudent fiscal management to uphold macroeconomic stability, leveraging increased tax revenues and dividends from the Reserve Bank of India. Capital expenditure targets are expected to remain steady around Rs 11.1 trillion, focusing on sustainable economic growth.
On the taxation front, the economists suggest potential revisions to tax rates aimed at stimulating consumption and increasing disposable income, particularly for lower income brackets. Simplification of capital gains tax and reforms in GST slabs are also recommended to streamline the tax regime and boost investor confidence.
Looking ahead, the forthcoming Union Budget is anticipated to introduce comprehensive measures aimed at enhancing employment opportunities, including employment-linked incentive schemes, urban employment guarantees, and investments in labor skilling programs. The focus will also be on enhancing female workforce participation through targeted policies and support systems.
The FICCI survey underscores the importance of proactive economic policies to sustain growth momentum and address emerging challenges in the evolving economic landscape.
