Indian Economy To Grow At 7.5-8% In FY24, Backed By Robust Momentum: FICCI President

FICCI President, Anish Shah, said that the economy is set to grow by 8 per cent in FY25 as well, helped by a strong growth momentum, positive sentiments, increase in private investments. 

The Indian economy is expected to grow by 7.5 per cent to 8 per cent in the current fiscal year, Anish Shah, President, the Federation Indian Chambers of Commerce and Industry, said on Monday. Shah stated that the economy is set to grow by 8 per cent in the next fiscal year (2024-25) as well, helped by a strong growth momentum, positive sentiments, increase in private investments. 

The industry body head cautioned that geopolitical factors could be a concern for India’s growth prospects. “We have seen great growth numbers so far at 7.8 per cent, 7.6 per cent. I expect that to continue because we have got strong momentum. We are seeing multiple companies investing, adding capacities, something that Mahindra group has done as well. We expect that growth momentum to continue at 7.5 per cent to 8 per cent in the current financial year and for next year, I would expect 8 per cent or higher,” he noted during an interview with PTI. Shah is also the Group CEO and managing director at Mahindra and Mahindra.

Notably, the Indian economy logged a growth rate of 7.8 per cent in the first quarter of FY24, and 7.6 per cent in the quarter ended September 2023. The growth rate for the first half of the current fiscal year came out to be 7.7 per cent. 

Regarding the economy’s pressure points, Shah said the main pressure points remained outside India. “We are seeing stress with regard to Israel and Gaza, added to what is happening in Ukraine. Our hope is that it does not expand or accelerate any further from there. For the sake of everyone, it gets to peace,” he stated.

The federation head raised the second concern about the economic problems being faced by the western countries. “We don't think that the problems there have abated as yet. Interest rate there has been at a much higher level than what we have seen here in India. If there is a greater economic impact in the western world, it will impact India. We see those as two major concerns,” he added.

Shah stated that the government needs to maintain the growth momentum to deal with the issues arising globally. Further, he noted that several Indian firms have deleveraged balance sheets and urged them to be prepared to play a bigger part if the world goes through an economic crisis. 

The FICCI official noted that the sentiment remained positive, with a pick up in investment and capacity addition happening gradually. “The pace of investment will accelerate further, as demand continues and growth continues in the economy,” he added. 

Expressing his views about the RBI’s decision to keep interest rates unchanged for the fifth consecutive time, the FICCI head said, “ One needs to give lot of credit to RBI for being pro-active, because they have acted early. That has helped. More important factor is to have inflation under control, than to reduce rates. It has worked so far. I would rely on the experts of the RBI to manage the economy which they have done very well so far.”

Shah further noted that once the economy is more stable and on a good track with a long-term perspective, the industry would welcome a reduction in rates. Notably, the RBI has not changed the short-term repo rate since February 2023. Shah added that currently the focus of the federation is on the Make in India initiative, women-led development, farm prosperity, and sustainability to assist the country achieve its goal of ‘Viksit Bharat’ by 2047.