Context:
High-interest rates and fiscal consolidation have greatly slowed down India’s economic growth for FY25. According to CRISIL, the GDP of India may reach trend growth of 6.7% during the year.
Key Highlights:
- In the first half of FY25, growth in private consumption improved, and its contribution above the decade pre that of the pandemic has been around investment growth, which has moderated.
- Gross fiscal deficit for FY25 is likely to be 4.9% of GDP as compared to 5.6% in FY24.
- There is some policy shift in the last two months by RBI in even reducing cash reserve ratio to 3.5%.
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