New Delhi
The Indian economy will grow at a rate of 6.5 percent in the next financial year (2025–26). EY Economy Watch has estimated this. EY believes that a well -balanced fiscal strategy that supports the fiscal discretion will increase the possibilities of long -term growth.
In the march version of EY Economy Watch, India’s actual GDP (GDP) growth rate is estimated to be 6.4 percent in FY 2024-25. The economic growth rate for the next financial year is estimated to be 6.5 percent. It says that for this, fiscal policy needs to be merged for the country’s visit to developed India.
Government spending will have to increase
According to the revised National Accounts Account data released by the National Statistics Office (NSO) last month, the actual GDP growth rate from FY 2022-23 to 2024-25 is now estimated to be 7.6 percent, 9.2 percent and 6.5 percent respectively. Regarding the quarter growth rate for the current financial year 2024-25, the third quarter growth is estimated at 6.2 percent. This means that the NSO will require an increase of 7.6 percent in the fourth quarter to get an annual GDP increase of 6.5 percent.
The report states that an increase of 7.6 percent in the last quarter will require a 9.9 percent increase in private final consumption expenditure. There has not been such a lot of increase in recent years. An alternative to this is to increase investment expenditure, in which capital expenditure growth towards the government can play an important role. It states that according to the revised estimates, the government’s fiscal deficit may be affected by any supplementary demand for grant.
Budget will have to be increased on this thing
The report said, with increasing population and developed economic structure, additional investment in education and healthcare may be necessary to maintain long -term growth and improve human capital results. According to the report of EY India, in the next two decades, India will need to gradually increase its general government education and health expenses, making it close to high-income countries.
Emphasis will have to be given on jobs
Analysis shows that in view of India’s youth population and growing workforce requirements, the government may need to increase the expenditure on education from the current 4.6 percent to 6.5 percent by the current 4.6 percent of GDP. To ensure better healthcare access and results, the health expenditure of the government will be increased from 1.1 percent to 2047-48 during this period to 3.8 percent.