India's economy likely to grow in 6.5-6.7% range in FY24: CII president

India’s economy is expected to grow in the range of 6.5-6.7 per cent in the current financial year backed by strong domestic drivers and robust capex momentum of the government, said industry body Confederation of Indian Industry (CII) on Thursday (June 1).

India’s Gross Domestic Product (GDP) grew by 6.1 per cent in the March quarter of 2022-23, pushing the annual growth rate to 7.2 per cent.

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

Talking to the media, the newly-elected president of CII, R Dinesh, said India’s GDP growth is expected to leapfrog to 7.8 per cent in the next decade (FY22-31) from 6.6 per cent previously recorded.

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“We expect GDP growth in a range of 6.5-6.7 per cent in 2023-24, supported by strong domestic drivers and robust capex momentum of the government,” Dinesh said.

He said the government’s structural reform agenda has enabled India to become the highest 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 the consumer price index (CPI) based retail inflation to fall within RBI’s target range in 2023-24.

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

The retail inflation declined to an 18-month low of 4.7 per cent in April and the data for May is scheduled to be released later this month.

The retail inflation was 5.66 per cent in March 2023 and 7.79 per cent in the year-ago period. The government has mandated the RBI to ensure inflation remains at 4 per cent with a margin of 2 per cent 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 May 2022, in a bid to check high inflation.

CII also suggested a host of reforms which the government should undertake to boost India’s growth potential.

(With input from agencies)