India aims to boost economic growth amidst slowdown

The Indian government is taking measures to reach its economic growth target of 6.5-7 per cent this fiscal year, as stated by the country’s economic affairs secretary, Ajay Seth.

Growth in the second quarter was slower than anticipated due to manufacturing and consumption challenges, prompting calls for rate cuts by the central bank.

The government anticipates growth to pick up in the latter part of the year, according to Ajay Seth.

Prime Minister Narendra Modi is expected to allocate additional funds to infrastructure projects, as part of the $576 billion budget plan announced in July.

India plans to increase incentives for electric vehicle manufacturers, boost domestic manufacturing, and raise the foreign direct investment (FDI) limit to 100 per cent from 74 per cent by amending insurance laws.

“The quarter ending December is likely to benefit from a rise in government expenditure over the last few weeks,” said Pranjul Bhandari, chief economist at HSBC Research.

Additionally, a significant increase in services and goods exports in October is expected to continue gaining momentum, driven by global inventory stocking in anticipation of higher trade tariffs in 2025.

Attribution: Reuters

Subediting: M. S. Salama