India Set to Surpass Japan: Economic Growth on the Horizon

India's economy is projected to become the fourth largest globally by 2026, overtaking Japan. The PHD Chamber of Commerce and Industry emphasizes boosting consumption with tax reforms, predicting GDP growth of 6.8% this year and 7.7% in 2025-26. Inflation targets are set around 4.5%.

India is on track to become the fourth-largest economy globally by 2026, surpassing Japan, according to the PHD Chamber of Commerce and Industry (PHDCCI). The organization's president, Hemant Jain, highlighted India's resilient economic growth, predicting a 6.8 percent increase in GDP this financial year and 7.7 percent in 2025-26.

The chamber is advocating for tax reforms ahead of the upcoming Budget, suggesting that the peak income tax rate of 30 percent should apply to individuals earning above Rs 40 lakh, instead of Rs 15 lakh. They also propose raising the income tax exemption threshold to Rs 10 lakh, aiming to boost consumer spending through increased disposable income.

Furthermore, PHDCCI anticipates a 25 basis points cut in the Reserve Bank's benchmark interest rate, considering a significant decrease in CPI inflation. The industry body remains optimistic, projecting inflation to drop to between 4 and 2.5 percent, depending on future food price dynamics.

(With inputs from agencies.)