India’s Real GDP Growth Projected at 6.5% in FY 2025-26: RBI
The Reserve Bank of India (RBI) has projected the real GDP growth for India in FY 2025-26 at 6.5%, with risks evenly balanced. This forecast comes as a sigh of relief for the Indian economy, which has been facing several challenges in recent years. The RBI’s projection is based on various factors, including the expected above normal south-west monsoon and several productivity-enhancing government policies.
The RBI’s projection for the real GDP growth is a significant improvement from the previous year’s growth rate. In FY 2024-25, the real GDP growth rate was 5.5%, which was lower than the pre-pandemic average. The RBI’s projection for FY 2025-26 indicates that the Indian economy is expected to recover strongly in the next fiscal year.
The RBI’s projection for the real GDP growth is based on several factors, including the expected growth in the services sector, which is expected to remain robust. The services sector is the largest contributor to India’s GDP and has been driving the country’s economic growth in recent years. The RBI expects the services sector to grow at a rate of around 7.5% in FY 2025-26, driven by the growth in industries such as IT, finance, and healthcare.
The RBI also expects the agriculture sector to perform well in FY 2025-26. The prospects for the agriculture sector appear favourable on the back of expected above normal south-west monsoon and several productivity-enhancing government policies. The RBI expects the agriculture sector to grow at a rate of around 3.5% in FY 2025-26, driven by the expected increase in crop production and productivity.
The RBI’s projection for the real GDP growth is also based on the expected growth in the industry sector. The industry sector is expected to grow at a rate of around 6.5% in FY 2025-26, driven by the growth in industries such as manufacturing, construction, and mining. The RBI expects the industry sector to benefit from the government’s initiatives to boost infrastructure development and the growth in global demand for Indian products.
The RBI’s projection for the real GDP growth is subject to several risks, including the risks related to the global economy, the impact of the Russia-Ukraine war on the global economy, and the risks related to the COVID-19 pandemic. The RBI has indicated that the risks to the real GDP growth are evenly balanced, which means that the growth rate could be higher or lower than the projected rate of 6.5%.
The RBI’s projection for the real GDP growth is a welcome development for the Indian economy. The projection indicates that the Indian economy is expected to recover strongly in FY 2025-26, driven by the expected growth in the services sector, the agriculture sector, and the industry sector. The RBI’s projection also indicates that the government’s initiatives to boost infrastructure development and the growth in global demand for Indian products are expected to have a positive impact on the economy.
In conclusion, the RBI’s projection for the real GDP growth in FY 2025-26 is a significant improvement from the previous year’s growth rate. The projection indicates that the Indian economy is expected to recover strongly in the next fiscal year, driven by the expected growth in the services sector, the agriculture sector, and the industry sector. The RBI’s projection is subject to several risks, including the risks related to the global economy, the impact of the Russia-Ukraine war on the global economy, and the risks related to the COVID-19 pandemic.
