GDP forecast: CII projects India's growth at 6.4–6.7% in FY26; reforms, demand to drive progress
The Confederation of Indian Industry (CII) on Thursday projected India's economic growth to range between 6.4 per cent and 6.7 per cent in the financial year 2025-26, driven largely by strong domestic demand.
However, it flagged geopolitical uncertainty and risks to global trade as potential headwinds to growth, reported news agency PTI.
Speaking at his first press conference after taking over as CII President, Rajiv Memani said the country was in a relatively strong position compared to global peers such as China, the US, the UK, and the Eurozone. 'We expect (economic growth in) a range of 6.4 to 6.7 per cent,' Memani said, adding that while there were clear downside risks, some of them had already been factored into the outlook.
CII noted that factors such as a favourable monsoon, increased liquidity from the RBI's recent CRR cut, and reduced interest rates would offer support to the economy. The central bank last month reduced the Cash Reserve Ratio (CRR) by 100 basis points, infusing Rs 2.5 lakh crore into the banking system. Additionally, a 50 basis point interest rate cut brought the benchmark rate down to 5.5 per cent, further aiding credit growth.
In its policy roadmap, CII proposed a comprehensive reform package across taxation, manufacturing, infrastructure, and power to enhance ease of doing business.
As per news agency ANI, the industry body called for rationalising the Goods and Services Tax (GST) structure from five slabs to three, 5 per cent for essential items, 28 per cent for luxury and sin goods, and a unified 12–18 per cent for the rest.
CII also recommended measures to improve input tax credit flow, reduce inter-state compliance complications, and bring petroleum, electricity, and real estate under the GST net.
For direct taxes, it urged the government to implement the new Income Tax Bill and encourage schemes like Advance Pricing Agreements to reduce litigation.
On the customs front, CII proposed a three-tier duty structure to help lower import costs and improve competitiveness, 0–2.5 per cent for raw materials, 2.5–5 per cent for intermediates, and 5–7 per cent for final goods.
Land and power reforms were also part of the recommendations, including reducing zoning categories, digitising power distribution, and rationalising electricity tariffs.
To address high logistics costs, CII called for railway freight corridor development and port connectivity enhancements.
'These reforms will collectively bring down operational costs, improve regulatory clarity, and make India a more attractive investment destination,' Memani said, as per ANI.
While cautioning that external risks remain, CII maintained that India's fundamentals remain strong and conducive for stable growth.
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