Representative image
| Photo Credit: KIRAN BAKALE
Reserve Bank on Friday (February 7, 2025) projected the growth rate for the upcoming financial year at 6.7%, up from 6.4% estimated for the current fiscal ending March.
Healthy Rabi prospects and an expected recovery in industrial activity should support economic growth in 2025-26, RBI Governor Sanjay Malhotra said while announcing his first bi-monthly monetary policy for the current fiscal.
Also read: RBI MPC meeting 2025: Banks to have ‘bank.in’ internet domain name, non-banks ‘fin.in’
Among the key drivers on the demand side, household consumption is expected to remain robust aided by the tax relief in the Union Budget 2025-26, he said.
Finance Minister Nirmala Sitharaman in Budget 2025-26 provided the biggest-ever tax break to the middle class to boost consumption after the economy slowed to its lowest pace since the pandemic.
India’s GDP growth fell to a 7-quarter low of 5.4% in July-September period of current financial year 2024-25, as against RBI’s own projection of 7%.
Also read: The social sector is again the target of spending cuts
The gross domestic product (GDP) rate of 6.4% will be the lowest since the Covid year (2020-21), when the country witnessed a negative growth of 5.8%. It was 9.7% in 2021-22; 7% in 2022-23; and 8.2% in the last fiscal ended March 2024.
The RBI Governor said, fixed investment is expected to recover, supported by higher capacity utilisation levels, healthy balance sheets of financial institutions and corporates, and the government’s continued emphasis on capital expenditure.
Published – February 07, 2025 12:39 pm IST
