Confederation of Indian Industry (CII) expects the country's economy to grow at 8 per cent in 2024-25 on the back of a better performance of the agriculture sector and higher levels of private investment, according to Sanjiv Puri, the newly elected President of the apex industry body.

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The farm sector which was hit by erratic weather in the last financial year is expected to perform better with the forecast of normal monsoon this year which will lead to higher rural consumption driving growth, Puri, who is also ITC chairman, observed.

CII's projection comes after RBI upgraded its estimate for India's GDP growth to 7.2 per cent last week.

“The growth estimate hinges critically on addressing the unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well, and expectations of a normal monsoon, among other factors,” Puri was quoted as saying in a CII statement.

According to CII's forecast, farm sector output is likely to grow at 3.7 per cent in FY25, up from 1.4 per cent in FY24.

It also expects industry to grow at 8.4 per cent against 9.3 per cent in the year before, and services at 9 per cent compared to 7.9 per cent in the year ended March.

“The stellar growth performance, expected during the current fiscal, is propelled by six growth drivers which have pivoted the economy to an accelerator mode,” a statement from CII said citing Puri.

The participation of private sector investment in the India growth story, public investment in physical and digital infrastructure, well-capitalised banking system, booming capital market and reduced dependence on oil are igniting the India growth story, Puri said.

According to CII's January-March 2024 business confidence survey, three-fourth of the over 200 respondents anticipated an improvement in private capital expenditure in the first half of the current fiscal, compared to the same period a year ago.

Gross fixed capital formation, or investments in plant and machinery, by the private sector stood at 23.8 per cent of nominal Gross Domestic Product (GDP) in FY23, higher than the level seen in the pre-pandemic years of FY19 and FY20.

Infrastructure-linked sectors like cement and steel, sectors such as electronic production, food processing and telecom that are benefiting from the government's production-linked incentives, logistics, renewable energy, automobiles and semi-conductors are witnessing an improvement in private investment levels, Puri added.