Indian economy: what to expect in 2025?

| Video Credit:
The Hindu

At the start of 2024, there was a lot of excitement about the Indian economy – the country was one of the fastest growing economies in the world and there was anticipation that India will become a $4 trillion economy in 2024-25 and become the world’s third-largest economy by 2027. The consensus was that the Indian economy was expected to grow at an impressive 7%.

However, the latest data from the National Statistics Office (NSO) showed the real GDP growth was at 5.4% in the second quarter of this financial year, the lowest in seven quarters. The Gross Value Added growth slowed to 5.8%.

This growth is underwhelming, given that Reserve Bank of India recently projected that the GDP would grow by 7%. In its meet in December, the MPC has now downgraded the growth forecast for 2024-25 to 6.6% from 7.2%.

Is the Indian economy slowing down or is the 5.4% growth pace just “a one-off number”, as Chief Economic Adviser V. Anantha Nageswaran put it? We spoke to Rajani Sinha Chief Economist at CareEdge to find out what’s in store for 2025.

Video: Thamodharan B.

Watch | P. Chidambaram: ‘When we come to power GST will be reformed; States will be empowered’

Former Union Finance Minister P. Chidambaram says no structural reforms have been carried out in the country since 2014.

He says there is no credibility to the government’s numbers and the claim of a V-shaped economic recovery after the pandemic is flawed; in actual fact it is a K-shaped recovery where a small section of the population has recovered sharply, but the big section has declined.

Mr Chidambaram questioned the Modi government’s promises of making the economy a $5 trillion one. He questioned the lack of world-class economists in the ruling party, said the government has mentally reconciled its self to 6% growth. He said the tax structure needs an overhaul.

Read more: Modi government has lost the plot on structural reforms: P. Chidambaram

Interview: Prashanth Perumal

Videography: Thamodharan B. and Siddharth Mathew Cherian

Production: Shivaraj S