India Inc. pegs GDP growth at 6.5-6.9% for 2025-26: FICCI pre-budget survey

NEW DELHI: India Inc. is optimistic about the growth prospects of the economy and wants the Union government's thrust on capital expenditure (Capex) to continue in the Union Budget 2025-26, according to a survey released by apex business chamber FICCI on Tuesday.

According to the survey results, about 64 percent of participants expressed optimism regarding India's growth prospects ahead of the Union Budget. Nearly 60 percent of participants projected a GDP growth rate between 6.5 and 6.9 percent for 2025-26.

Though the numbers mark a moderation from the high growth of over 8.0 percent witnessed in 2023-24, it is in sync with persistent headwinds on account of external factors.

The majority of respondents highlighted the need for sustaining public Capex, with 68 percent calling for a thrust on Capex to sustain the growth momentum.

At least a 15 percent increase in Capex allocation for FY 2025-26 is being looked forward to by members of the Indian industry.

Additionally, over half of the respondents emphasised the importance of reforms to further enhance the ease of doing business.

Reforms pertaining to factors of production-particularly with respect to areas like land acquisition, labour regulations, and power supply-remain important.

As last year's Union Budget had indicated a roadmap on the next-generation reforms, the industry members look forward to further guidance on the same, the survey states.

"The government's commitment to fiscal consolidation has put us in good stead, and the survey participants expected the government to remain on that course," the survey states.

About 47 percent of the participants expect the government to meet the fiscal deficit target of 4.9 percent for FY 2024-25, and another 24 percent reported that the government could improve and report a lower fiscal deficit number for the current year.

Further, concern was expressed regarding the muted demand situation. A significant number of industry members have called for a review of the direct tax structure. A relook at the slabs and the tax rates is warranted, as this could leave more money in the hands of people and spur consumption demand in the economy.

Respondents also called for a strong policy push on simplifying the tax regime, incentivising the development of green technologies/renewables and EVs, and easing compliance through digitisation. (IANS)

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