GDP to grow at 6.5-6.8% in FY24; festive, govt spends key drivers: Deloitte

Deloitte India on Wednesday said it expects GDP growth in the current fiscal to be in the range of 6.5-6.8 per cent primarily due to upcoming festive spending as well as higher government expenditure before the national elections mid-next year.

In its India economic outlook report, released earlier this month, Deloitte said India will need at least 6.5 per cent growth every fiscal to become the world's third largest economy by 2027, with its Gross Domestic Product (GDP) crossing $ 5 trillion.

The country needs 8-9 per cent economic growth to become a developed country by 2047, it added.

The Indian economy grew 7.8 per cent in the June quarter, higher than the 7.2 per cent in the year-ago period.

"In light of the Q1 GDP growth, we have revised our growth estimate for this year to reflect it. We expect GDP to grow in the range of 6.5-6.8 per cent primarily due to festive spending in the coming months followed by higher government spending before the upcoming national elections mid-next year," Deloitte India said.

Deloitte India Economist Rumki Majumdar said navigating geopolitical uncertainties and the slowdown in global economy, undoubtedly, would not be easy.

India will have to rely on its own domestic demand to firepower its growth, specifically, private consumption and investment spending, she said.

"What works in India's favour on the private consumption front are the size of its consumer base, the rising income, and the aspirations of its young population, which is the largest in the world.

"As for investments, with the size and scale of operations it has to offer to global companies, the availability of skill and talent, technology and innovation capabilities, India continues to be an attractive investment destination," Majumdar said.

India, with a GDP size of $ 3.4 trillion, is the fifth largest economy in the world, after US, China, Japan, and Germany.

Deloitte said India's GDP growth will be over 6.5 per cent next year as geopolitical uncertainties subside, and the global economy bounces back on a stronger growth path.

Deloitte said India's micro, small, or medium enterprises (MSME) will be key in generating income, capabilities, capacities, and ecosystems needed for sustained growth in consumption and investment that is broad-based and comes from all sections of the economy.

The MSME sector will also drive innovation and new opportunities in a cost-effective manner. It will drive job creation and entrepreneurship, especially for women in rural India, it added.