India's economy is continuously showing strength amidst economic uncertainties and challenges at the global level. Finance Minister Nirmala Sitharaman said on Saturday that the economic foundation of the country is very strong and that is why India's growth is expected to reach at least 7% in the financial year 2024-25. He said this at the Hindustan Times Leadership Summit organized in New Delhi.
Benefit from reduction in GST rates
According to Sitharaman, continued growth in consumer spending, low inflation and some significant recent cuts in GST rates have further strengthened economic activity. He said that the growth figures that have come out for the second quarter raise hopes that this pace will continue in the entire financial year. India's GDP grew by 6.5% in the last financial year, while the growth rate during the three months ending September this year was recorded at 8.2%. The economy has got additional momentum due to sharp increase in domestic demand before festivals and increased production by industries.
RBI gave good signals
Meanwhile, the Reserve Bank of India has also reduced the repo rate by 25 basis points in view of the economic indicators and increased the GDP growth estimate for the current financial year from 6.8% to 7.3%. The inflation estimate has also been reduced to 2%, which is expected to provide relief to common consumers and industries.
However, challenges still remain at the global level. High tariffs imposed by the US have put pressure on India's trade deficit and pushed the rupee to a record low. To deal with these situations, the central government is continuously emphasizing on economic reforms. This includes reduction in consumer taxes, changes in labor laws and simplification of financial rules.
Sitharaman also said that investor confidence is making the country's economy stronger, the effect of which is clearly visible in the increasing participation in the stock market and increasing demand for home loans. Speaking on the rupee, he said that it is better to let its value be determined naturally in the market.
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