Indian economy to grow 7.5-8% in FY24: FICCI chief

The newly appointed president of the industry body Federation of Indian Chambers of Commerce and Industry (FICCI) and Mahindra Group CEO Anish Shah sees India's economy (gross domestic product) to grow 7.5-8% in the current fiscal year. He expects growth momentum to continue in the next financial year and pegs GDP growth for FY25 at 8%. He backed his projections on strong growth momentum and investment boost.

He said the growth numbers in Q2 FY24 have been "great", and that the momentum is expected to remain "strong" in the remaining fiscal year. "We expect that growth momentum to continue at 7.5 per cent to 8 per cent in the current financial year and for next year, I would expect 8 per cent or higher," he said during an interview to a national news agency.

Anish Shah took over as new FICCI President for 2023-24 from Mr Subhrakant Panda on December 9, 2023. Shah is the Group CEO of Mahindra Group and the Managing Director of M&M, the parent company of the group.

A Ph.D. from Carnegie Mellon’s Tepper School of Business and a Post-Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad, Shah was president and CEO of GE Capital India from 2009-14, where he led the transformation of the business, including a turnaround of its SBI Card joint venture. His career at GE spanned 14 years, during which he held several leadership positions at GE Capital’s US and global units.

After India’s economy recorded stronger-than-expected growth of 7.6% in Q2 FY2024, led by industry, many financial institutions have raised the growth forecast for the full financial year 2023-24 (FY24).

The central bank's monetary policy committee (MPC) this month decided to increase the GDP growth estimate for FY24, while also increasing its estimates for the third and fourth quarters of the fiscal year 2023-24. For the full fiscal year, the RBI's MPC projected the GDP to increase to 7%, up from 6.5% estimated earlier.

In the next fiscal year, the country could see 6.7% growth in April-June FY25, Das said.

SBI Research, the research wing of state lender SBI, has forecast that the economy grew 7.6%, better than consensus, in Q2 FY24 on the back of “buoyant growth” in manufacturing (at 13.9%) and construction (13.3%) while the GVA grew 7.4%. Nominal GDP grew 9.1% in Q1.

Ratings agency ICRA said the YoY growth in GDP eased mildly to 7.6% in Q2 FY2024, sharply exceeding ICRA’s expectations. For the second half of the fiscal year, ICRA, however, expects GDP growth to moderate in H2 FY2024 amid sub-par monsoon and slowdown in capex ahead of General Elections.

Morgan Stanley revised the India GDP growth forecast target by 50 basis points to 6.9% for FY24. Goldman Sachs also revised the calender year growth forecast by 20 basis points to 6.7%. However, it left the CY24 GDP growth forecast unchanged at 6.2%. Citi, on the other hand, said the economy could grow 50 basis points higher than its earlier forecast to 6.7% on-year.