The Indian economy is projected to maintain its high growth trajectory in FY2024-25, fueled by robust fixed investments and a revival in private consumption, according to ITC’s latest annual report.
Rural Markets Show Recovery Signs
The report highlights “green shoots of recovery” in rural markets, alongside improved employment conditions and sustained momentum in the manufacturing and services sectors. These factors are expected to boost consumption demand in the near term.
Agricultural Sector’s Positive Impact
A favorable Rabi harvest and normal monsoons are also predicted to support economic growth, as detailed in the ITC annual report for FY 2023-24. The agricultural sector remains a cornerstone of the Indian economy, with ongoing efforts to enhance productivity and value addition being crucial for increasing farmers‘ income.
Structural Drivers of Growth
India is recognized as one of the fastest-growing major economies globally, with significant potential for medium and long-term growth. Key structural drivers include a favorable demographic profile, increasing affluence, rapid urbanization, and accelerated digital adoption.
Government Interventions and Infrastructure Development
The report credits various government interventions for India’s growth trajectory. These include expanding physical and digital public infrastructure, enhancing the competitiveness of the manufacturing sector, implementing indirect and direct taxation and financial sector reforms, and promoting ease of doing business.
Focus on Capital Expenditure and Agriculture
Increased capital expenditure and infrastructure development are anticipated to drive growth in domestic manufacturing. Additionally, a focus on agri-related schemes is likely to boost farmers’ welfare and rural consumption demand, creating a virtuous cycle of investment, employment, and consumption.
Challenges and Future Outlook
Despite the positive outlook, the report acknowledges uncertainties in the external environment. However, it emphasizes that policy interventions aimed at supporting sustainable livelihoods and fostering inclusive growth are well-placed to benefit the Indian economy going forward.