India Targets 6.5-7 pc Growth Despite Sluggish First Half: Economic Affairs Secretary

New Delhi, Dec 3 (KNN) The government is strategically positioning itself to achieve its economic growth target of 6.5-7 per cent for the current fiscal year, despite experiencing slower-than-expected growth during the first two quarters. 

Economic Affairs Secretary Ajay Seth acknowledged the challenges while expressing confidence in accelerated growth during the second half of the year.
India's economic expansion decelerated more significantly than anticipated in the second quarter, primarily due to subdued performance in manufacturing and consumption sectors. 

This slowdown has intensified pressure on the central bank to consider potential rate adjustments to stimulate economic activity.

In response to these economic challenges, the government has unveiled a comprehensive strategy. Junior Finance Minister Pankaj Chaudhary highlighted the implementation of an ‘investor-friendly policy’ designed to attract investments and streamline tax regulations. 

These efforts are complemented by Prime Minister Narendra Modi's post-electoral strategy, which includes substantial infrastructure spending as part of the USD 576 billion budget plan announced in July.

The government is also exploring innovative measures to boost domestic economic growth. 

Plans include increasing incentives for electric vehicle manufacturers to enhance domestic production and amending insurance laws to raise the foreign direct investment (FDI) limit from 74 per cent to 100 per cent. 

These initiatives aim to create a more attractive investment landscape and stimulate economic expansion.

Financial analysts are optimistic about the potential impact of these strategies. Pranjul Bhandari, Chief Economist, HSBC Research, noted that the upcoming quarter ending December is likely to benefit from increased government expenditure. 

She also highlighted the promising outlook for services and goods exports, anticipating momentum driven by global inventory stocking in preparation for potential trade tariffs in 2025.

As India navigates its economic recovery, these multifaceted approaches demonstrate the government's commitment to maintaining robust growth and attracting both domestic and international investments.

(KNN Bureau)