The Indian economy is likely to sustain its high growth trajectory in FY2024-25, driven by strong momentum in fixed investments and a pickup in private consumption, said conglomerate ITC in its latest annual report.

India’s growth is expected to be supported by a good Rabi harvest and normal monsoons (Reuters)

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Besides, there are “green shoots of recovery in rural markets”, improving employment conditions and sustained momentum in manufacturing and services sectors, which augur well for consumption demand in the near term, it added.

What drives India’s growth?

The growth would also be supported by a good Rabi harvest and normal monsoons, according to the ITC annual report for FY 2023-24.

“India continues to be acknowledged as one of the fastest growing major economies in the world with significant headroom for growth over the medium and long-term benefiting from a slew of purposeful interventions over several years,” it added.

Factors like favourable demographic profile, increasing affluence, rapid urbanisation and accelerated digital adoption represent some of the key structural drivers of growth of the Indian economy.

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“Multi-dimensional interventions undertaken by the Government of India towards the expansion of physical and digital public infrastructure, enhancing the competitiveness of the manufacturing sector, indirect/direct taxation and financial sector reforms along with measures to promote ease of doing business are expected to power the economy going forward,” it said.

Moreover, stepped-up capital expenditure outlay and focus on infrastructure are expected to drive growth in domestic manufacturing, and focus on agri-related schemes are likely to boost farmers’ welfare and rural consumption demand, spurring a virtuous investment employment-consumption cycle, it added.

How important is India’s focus on agriculture?

The Kolkata-headquartered company said the agricultural sector is pivotal to the Indian economy.

Steps like enhancing agricultural productivity and value addition to international standards while improving market linkages simultaneously remain critical to strengthening the competitiveness of the agri sector and increasing farmers’ income.

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Meanwhile, the report also highlighted that the Indian economy “contends with uncertainties” in the external environment and policy interventions focused on supporting sustainable livelihoods and fostering inclusive growth augur well for the economy.