India’s GDP Growth Forecast: CII Anticipates 6.4% to 6.7% Expansion

The Confederation of Indian Industry (CII) has forecasted India’s economic growth for the financial year 2025-26 to be between 6.4% and 6.7%. This optimistic outlook is primarily attributed to robust domestic demand. However, CII has also highlighted potential challenges, including geopolitical uncertainties and risks to global trade, which could impact this growth trajectory. Rajiv Memani, the newly appointed CII President, emphasized India’s relatively strong position compared to major global economies during a recent press conference.

Economic Growth Projections

CII’s growth projection reflects a cautious optimism about India’s economic future. Rajiv Memani stated that while the expected growth range is between 6.4% and 6.7%, there are identifiable risks that could hinder this progress. He noted that some of these risks have already been incorporated into the growth outlook. The CII’s assessment comes at a time when global economic conditions remain volatile, particularly in comparison to countries like China, the United States, and those in the Eurozone. The organization believes that India’s strong domestic demand will be a significant driver of growth, despite external uncertainties.

Supportive Economic Factors

Several factors are expected to bolster India’s economy in the coming years. CII pointed to a favorable monsoon season, which is crucial for agriculture, as a positive influence. Additionally, the Reserve Bank of India’s recent decision to cut the Cash Reserve Ratio (CRR) by 100 basis points has injected approximately Rs 2.5 lakh crore into the banking system, enhancing liquidity. Furthermore, a reduction in interest rates to 5.5% is anticipated to stimulate credit growth, making borrowing more accessible for businesses and consumers alike. These measures are designed to create a more conducive environment for economic expansion.

Proposed Reforms for Economic Enhancement

To further improve the business landscape, CII has proposed a comprehensive reform package targeting various sectors, including taxation, manufacturing, infrastructure, and power. One of the key recommendations is to simplify the Goods and Services Tax (GST) structure from five slabs to three, with rates set at 5% for essential goods, 28% for luxury items, and a unified rate of 12-18% for other products. CII also advocates for better input tax credit flow and reduced compliance complexities across states. In addition, the organization suggests bringing sectors like petroleum, electricity, and real estate under the GST framework to enhance efficiency.

Addressing Logistics and Operational Costs

CII’s recommendations also include significant reforms in customs duties and logistics. The organization proposes a three-tier duty structure aimed at reducing import costs and enhancing competitiveness. This structure would set duties at 0-2.5% for raw materials, 2.5-5% for intermediate goods, and 5-7% for final products. Moreover, to tackle high logistics costs, CII emphasizes the need for developing railway freight corridors and improving port connectivity. Memani stated that these reforms would collectively lower operational costs, improve regulatory clarity, and position India as a more attractive destination for investment, despite the ongoing external risks.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn