India's GDP Growth Projected to Slow in FY26: Report India's GDP growth is set to decline to 6.4 per cent in 2024-25, the slowest pace in four years. This marks a sharp drop from the 8.2 per cent growth recorded in FY24, when India remained the fastest-growing major economy. The economy expanded by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.

India's real Gross Domestic Product (GDP) growth is projected to slow to 6.3-6.8 per cent in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25. The projection suggests a sluggish economic outlook compared to the robust expansion seen in previous years, raising concerns about India's long-term growth trajectory.

The survey, prepared by the chief economic advisor to the Finance Ministry, underlined that while India's economic fundamentals remain strong—buoyed by a stable external account, fiscal consolidation, and resilient private consumption—external challenges such as geopolitical tensions and global economic uncertainties could dampen growth prospects.

The report also highlighted that while central banks globally are shifting toward more accommodative monetary policies, varying interest rate strategies across regions could lead to economic divergences.

India's GDP growth is set to decline to 6.4 per cent in 2024-25, the slowest pace in four years. This marks a sharp drop from the 8.2 per cent growth recorded in FY24, when India remained the fastest-growing major economy. The economy expanded by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.

A weaker manufacturing sector and sluggish corporate investments have been identified as key reasons for the slowdown. The survey pointed to India's slowing business spending and lower consumer demand as additional factors contributing to the deceleration.

Despite concerns, investment activity is expected to gain momentum, supported by higher public capital expenditure and improved business expectations. The survey noted that capacity utilization in manufacturing remains above long-term averages, with private sector order books reflecting steady growth. However, excess global capacities in sectors like steel could lead to aggressive trade policies, potentially tempering these gains.

Implications for 'Viksit Bharat'

The economic slowdown raises questions about India's ability to achieve its ambitious target of becoming a developed nation by 2047. Experts emphasize that for this goal to materialize, India needs to sustain an average growth rate of 8 per cent over the next two decades—far above current projections.

The International Monetary Fund (IMF) estimates India's growth will hover around 6.5 per cent in the coming years, while the World Bank projects 6.7 per cent. Goldman Sachs expects GDP to grow by 6 per cent in FY25 and 6.3 per cent in FY26.