New Delhi [India] Riding on 8.2 per cent GDP growth along with a record dividend of Rs 2.1 lakh crore from the Reserve Bank of India, the government has the option to reduce the fiscal deficit target to 5.1 per cent in FY20. Government sources told ANI that the decision on reducing the fiscal deficit target will not be taken and will be announced in the main budget in July. He said that IMD has predicted a good monsoon, which is expected to improve the growth of the agriculture sector in the current financial year. The manufacturing sector is also expected to continue its growth momentum. Before 2020, companies had balance sheet problems and growth was stagnant.Now, they understand that "improved health of the banking sector will lead to growth in bank credit, which will boost growth in FY2025. Growth projections indicate that India will grow at 7 per cent in FY2025." Sources say that no major economy in the world is even close to India's 8.2 percent GDP growth in FY24. India's growth of 7.8 percent between January-March 2024 is much more than other major economies of the world. The closest to India are China with a growth of 5.2 percent, Indonesia with 5.1 percent, the United States with 3 percent, the Franc with 0.9 percent and the UK with 0.2 percent. Japan and Germany showed negative growth of -0.2 percent and -0.9 percent respectively.Sources said growth momentum will continue in FY2025 "Domestic economy activity remains resilient, supported by strong investment demand, upbeat businesses and consumer sentiments, strong corporate and bank balance sheets. Agriculture sector in FY2024 Gross value added (GVA) growth in India was 1.4 per cent, down from 4.7 per cent in FY2023, but contrary to forecast, agriculture played a major role in total GDP at 8.2 per cent in FY2024, the source told ANI. India's agricultural growth is double the estimated 0.7 per cent in February, with manufacturing GVA expanding by 9.9 per cent due to a negative growth of 2.2 per cent in FY20, the sources said, adding that private sector Non-financial gross fixed capital formation has gained momentum in the last two years, with a compound annual growth rate (CAGR) of 4.6 per cent in the period January-March 2024.
“For the rest of the decade, barring geopolitical disturbances, private capital spending will be a key driver of growth and employment,” the source said." Sources indicated that a full economic survey will be published before the main budget in July. Sources said the government is keeping an eye on shipping rates due to the ongoing Red Sea crisis as shipping disruptions could hit capital formation but There are also some downside risks to the economy, including rising retail exposure to stocks, which prevents the domestic savings rate from recovering, the sources said. Further, continued pressure on government capital expenditure and strategic trade agreements like India-EFTA and Economic Partnership Agreement (TEPA) will lift growth prospects in FY25.
“For the rest of the decade, barring geopolitical disturbances, private capital spending will be a key driver of growth and employment,” the source said." Sources indicated that a full economic survey will be published before the main budget in July. Sources said the government is keeping an eye on shipping rates due to the ongoing Red Sea crisis as shipping disruptions could hit capital formation but There are also some downside risks to the economy, including rising retail exposure to stocks, which prevents the domestic savings rate from recovering, the sources said. Further, continued pressure on government capital expenditure and strategic trade agreements like India-EFTA and Economic Partnership Agreement (TEPA) will lift growth prospects in FY25.