• Notification Date: 10-01-2025
• Notification No: N/A

India's Economic Outlook Under a New Threat of Growth Slowing

India's projected economic growth this fiscal year ending in March has been revised to 6.4%, which is the slowest in four years. That ominous forecast came as a downward revision from earlier estimates and reflects weakness in investment, manufacturing and faltering corporate earnings. Thus fresh doubt has been raised on whether Prime Minister Narendra Modi's ambitious targets for the economy and the country are capable of sustaining its high performance on the world stage.

While the Indian economy did very well the previous year, the on-going slowdown has provided policymakers with a big push to act quickly. In this context, experts have asked for the opening of monetary policy space by further cutting interest rates or expanding fiscal measures in order to revive business confidence. During her current engagements with business leaders, Finance Minister Nirmala Sitharaman discussed the methods to increase demand which includes tax and tariff cuts.

Because growth has slowed, Modi has made significant changes, such as appointing a new governor to the central bank, Sanjay Malhotra, who is more likely to give preference to economic expansion as opposed to sticking to strict price stability. Challenges still persist because wage growth and employment remain weak and this constitutes a cap on consumer spending. Growing worries significantly reflected through in the stock market too after being on the downtrend at the opening of fall 2024, it collapsed 12%, Nifty 50 ended at 8.7%.

As India moves forward with these unknowns, the analysts suggest some bold decisions the government should make now that these uncertainties eclipse the chances of a second presidency for Donald Trump. So far, India continues to stay in fragile balance, awaiting revival that will help it move on the world economic front and continue its momentum.