Indian economy projected to grow by 7.1% in FY25: NIPFP

NIPFP estimates India's GDP growth at 7.1% for FY25, aligning with projections from ADB and Fitch (7%). However, IMF, S&P, and Morgan Stanley predict a lower growth rate of 6.8%. The government's fiscal consolidation efforts rely on tax buoyancy and reduced revenue expenditure, while state capex is expected to grow in FY24 due to increased central transfers.

Economic think-tank National Institute of Public Finance and Policy (NIPFP) on Friday said it has estimated India's GDP growth at 7.1 per cent for the current fiscal, using high-frequency models.

NIPFP, in a series of tweets, said the Centre is on a fiscal consolidation path through buoyancy in taxes and revenue expenditure compression.

The economic think tank said that in 2023-24, states' capex growth is robust due to significant capex transfers from the Centre.

While the Asian Development Bank (ADB) and Fitch Ratings have estimated India's growth at 7 per cent, the International Monetary Fund (IMF), S&P Global Ratings and Morgan Stanley projected a 6.8 per cent growth rate for FY25.