Summary:

Deloitte India's August report on the India Economic Outlook predicts a 7-7.2% growth rate for the country's GDP in the current fiscal year. This expansion is fueled by solid economic fundamentals and ongoing domestic policy changes. The Union Budget 2024-25 includes programs to increase agricultural production, generate jobs for young people, stimulate manufacturing, and improve financial access for MSMEs. These initiatives are projected to boost supply-side demand, lower inflation, and increase consumer spending, particularly in rural regions.

Despite a 7.2% growth forecast for FY25, private consumer expenditure has been relatively steady over the last five years due to the pandemic, inflation, and weak agricultural output. According to Deloitte's analysis, there has been a movement towards non-food and discretionary purchases, showing changing lifestyles in both rural and urban India. The Household Consumption Expenditure Survey shows a rise in expenditure on durable goods and processed foods, which is being driven by urbanization and rising female employment participation. Equitable income distribution has the potential to enhance rural demand and growth possibilities.

Source: IBEF

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