The Indian economy will expand by 6.5% in the financial year 2025-26, according to the just-released March 30, 2025 EY Economy Watch report.
6.4% growth for FY 2024-25 had been projected after the latest National Statistical Office data on revised national accounts.
The report emphasizes the requirement of appropriately calibrated fiscal policy that encourages the development of human capital while maintaining fiscal prudence. It highlights that investment in the fields of health and education is critical to ensuring long-term sustained growth and overall improvement in human capital outcomes.
For the achievement of these goals, the report says that India will need to increase general government expenditure on education and health to levels comparable with those of high-income economies over time.
In addition, the report indicates that it will require gigantic rises in private consumption and investment expenditures, particularly in government capital expenditures, to realize the anticipated growth.
As India is experiencing its economic cycle, the focus on building infrastructure and human capital will be vital to realizing its potential as a rapidly emerging economy.
