The Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty, economic think tank NCAER has said.

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In its July 2024 issue of Monthly Economic Review (MER), NCAER said real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand.

"Based on the momentum in the high-frequency indicators, normalised monsoon, a relatively benign global outlook and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 per cent, and possibly closer to 7.5 per cent," NCAER director general Poonam Gupta said.

Gupta said the Union Budget 2024-25 lived up to the expectations of unwavering commitment to fiscal consolidation, prudence, and quality.

The Budget has kept the fiscal deficit target at 4.9 per cent of GDP and capital expenditure at 2.4 per cent of GDP during 2024-25.

According to the National Council of Applied Economic Research (NCAER), the short to medium-term growth strategy is based on six key areas -- private sector capital formation, green transition financing, MSME development, agricultural transformation, Education and skill development, and enhanced state capacity.

The NCAER-NSE business confidence index (BCI) increased to 149.8 in the first quarter (Q1) of FY25, up from 138.2 in the fourth quarter (Q4) of FY24, indicating an improvement in business sentiments.

The International Monetary Fund (IMF) revised its growth projection for India upward to 7 per cent, while the Asian Development Bank (ADB) maintained its projection at 7 per cent as of July 2024 for FY2024-25. The range of projections for India for the current fiscal year is between 6.6 to 7.2 per cent.

As per the Economic Survey 2023-24, India's real GDP grew by 8.2 per cent in FY2023-24 due to stable consumption and improving investment demand, and it is projected to grow between 6.5–7 per cent in FY2024-25.

The Union Budget for FY2024-25 emphasised fiscal prudence and capex. Nominal GDP is projected to grow at 10.5 per cent in FY2024-25; while the fiscal deficit is budgeted at 4.9 per cent of GDP.