FinMin sees growth crossing RBI view

Even as the finance ministry expects FY24 economic growth to exceed the central bank's projection of 7%, it also expects growth in the following year, FY25, to be close to 7%, even though geopolitical risks could lead to supply chain disruptions and a rise in inflation.

Separately, agencies such as the International Monetary Fund and the World Bank have predicted FY25 gross domestic product (GDP) growth in the region of 6.3-6.4%.

The ministry's latest monthly economic review also said that under reasonable assumptions, India can aspire to become a $7 trillion economy by 2030, adding that in the next three years, the country is expected to become a $5 trillion economy, the third largest in the world, and the government has set a higher goal of becoming a "developed country by 2047."

India will continue its upward growth trajectory on the back of stable and robust domestic demand, expanding private consumption and investments, and structural reforms, chief economic adviser in the finance ministry,V. Anantha Nageswaran, and his team said in the review that was released by the department of Economic Affairs on Monday.

"It is eminently possible for the Indian economy to grow in the coming years at a rate above 7% on the strength of the financial sector and other recent and future structural reforms. Only the elevated risk of geopolitical conflicts is an area of concern," the review said.

The monthly review said that priority areas for future reforms include skilling, learning outcomes, health, energy security, a reduction in the compliance burden for small businesses and gender balancing in the labour force.

Experts agreed that 7% growth in FY25 is achievable.