India's GDP growth rate will be 6.8% in fiscal year 2025, estimates rating agency Crisil

Rating agency 'Crisil estimated on Wednesday that India's gross domestic product (GDP) growth rate in the next financial year will be 6.8%, which is 7.6% in the current financial year. The agency said growth will decline due to lower demand due to higher interest rates and fiscal pressures. However, the agency also said that despite the decline in economic growth rate, India will remain a fast-growing large economy.

CRISIL said the nature of government spending will provide some support to the investment cycle and rural incomes. Its chief economist Dharamkirti Joshi told reporters that he expects the Reserve Bank of India (RBI) to cut rates by 0.50 to 0.75%age points in fiscal year 2025. But the cuts will be gradual and not before June. Joshi said the RBI will have to change the monetary policy stance from accommodative to neutral before cutting rates.

The agency said that inflation is declining and this decline will continue in FY 2025 also due to better agricultural production, control of food inflation and softening of oil and commodity prices.

Amish Mehta, Managing Director and Chief Executive Officer of the agency, said, that in the next seven financial years, the Indian economy will cross the $ 5,000 billion (five trillion US dollars) mark and will reach close to $ 7,000 billion (seven trillion US dollars). He said the estimated average annual growth rate of 6.7% would end at $7 trillion.

He said that by fiscal year 2031, India will be the world's third-largest economy and upper-middle-income country. Which will help in domestic consumption. At the same time, Joshi said that by the end of this decade, the country's per capita income will cross the level of $4,500.