Farm labourers work at a paddy field, in Mohanpur near Agartala.
Credit: PTI photo
New Delhi: Ebbing El Nino effect and projected normal monsoon are likely to boost agriculture sector growth to 3.7 per cent in the current financial year from a sluggish 1.4 per cent expansion recorded in the previous year, a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) showed on Thursday.
As per the latest round of FICCI’s Economic Outlook Survey, India’s gross domestic product (GDP) is likely to post an annual growth of 6.8 per cent in the first half of the current financial year. The GDP growth is likely to accelerate to 7.2 per cent in the second half of the fiscal year, taking the average for the whole financial year 2024-25 to 7 per cent.
Services sector is projected to grow at 7.4 per cent while the growth in the industry sector is estimated at 6.7 per cent for the current financial year.
The survey is based on responses from leading economists representing industry, banking and financial services sector, as per a statement issued by FICCI.
India’s GDP grew by 8.2 per cent during the financial year ended March 2024, as per the latest government data. Major organisations including the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have pegged India’s growth for the current fiscal year at 7 per cent.
Inflation
As per the FICCI survey, the Consumer Price Index (CPI) based retail inflation is likely to remain in the range of 4.4 per cent to 5 per cent. The median forecast for CPI based inflation has been put at 4.5 per cent. “While food prices remain sticky with inflation inching up in cereals, fruits and milk, the survey participants expect easing of prices in the second quarter with kharif output reaching the market,” FICCI said in the survey report.
The surveyed economists expect that the Reserve Bank of India (RBI) would cut policy repo rate by 50 basis points to 6 per cent by the end of the current financial year. Majority of the economists are of the view that a cut in the repo rate is expected only in the “latter half of the current fiscal year as RBI is expected to continue with its cautious approach keeping a close watch on the inflation trajectory,” FICCI said.
Urban employment boost
On the Union Budget 2024-25, the participating economists indicated that the forthcoming budget is expected to introduce comprehensive measures to boost employment and enhance workforce capabilities.
Announcement of an Employment-linked incentive scheme, introduction of an urban counterpart of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), increased investments in labour skilling programmes and soft infrastructure, and implementation of targeted policies and support systems to increase female labour force participation are some of suggestions highlighted by the surveyed economists.
Finance Minister Nirmala Sitharaman scheduled to present the Union Budget 2024-25 on July 23.
As per the surveyed economists, the agriculture sector is expected to receive greater attention in the upcoming budget. The economists proposed creation of reform-linked incentives for states to implement agricultural reforms and improve efficiency; increased support for developing weather-resistant crops and implementing adaptive measures against climate effects; measures to improve storage infrastructure; and establishment of a price forecasting mechanism for non-MSP crops to strengthen the agri-supply chain.