Indian Economy May Grow 6.5-6.7% In FY24: CII President R Dinesh

Industry body CII, on Thursday, said India's economy is expected to grow in the range of 6.5–6.7% in the current financial year, supported by strong domestic drivers and the robust capex momentum of the government.

India's Gross Domestic Product (GDP) grew by 6.1% in the March quarter of 2022–23, pushing the annual growth rate to 7.2%.

The growth has propelled the country's economy to $3.3 trillion, setting the stage for achieving the $5 trillion target in the next few years.

Addressing the media, newly elected President of the Confederation of Indian Industry (CII), R Dinesh, said India's GDP growth is expected to leapfrog to 7.8% in the next decade (FY22–31) from 6.6% previously recorded.

"We expect GDP growth in a range of 6.5–6.7% in 2023–24, supported by strong domestic drivers and the robust capex momentum of the government," Dinesh said.

He said the government's structural reform agenda has enabled the country to become the fastest-growing economy in the current scenario, and we believe this can be sustained going forward.

"This year is very important in view of India assuming the G20 Presidency. The entire world is looking at India. In the last year, there has been a significant focus on India, and the opportunities that arise from this are important for us," the CII President said.

The industry body also expects consumer price index (CPI)-based retail inflation to fall within the RBI's target range in 2023–24.

Dinesh stressed that given the fast moderation in inflation, the Reserve Bank should continue with a pause in the short-term lending rate (repo rate) and also change its stance to neutral.

Retail inflation declined to an 18-month low of 4.7% in April, and the data for May is scheduled to be released later this month.

Retail inflation was 5.66% in March 2023 and 7.79% in the year-ago period.

The government has mandated the RBI to ensure inflation remains at 4% with a margin of 2% on either side.

In the last monetary policy, the central bank maintained a status quo on the interest rate front. Prior to that, the RBI had raised the repo rate by 250 basis points in tranches beginning in May 2022 in a bid to check high inflation.

The CII also suggested a host of reforms that the government should undertake to boost India's growth potential.