EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Select your location
Local sites
India Economic Pulse
India Economic Pulse - economic indicators and policy measures decodes high frequency economic indicators and the direction of government thinking, to make them more relevant for businesses.
Join the conversation
We are pleased to present the September 2024 edition of EY India Economic Pulse by our Tax and Economic Policy Group. This edition highlights India’s robust economic trajectory and resilience amid global trends.
Key Highlights:
1. Stable Global Outlook: Global growth forecasts remain steady at 3.2%-3.3% for 2024-2025. Inflation and interest rates are generally on a downward trend, with a recent cut in US Fed interest rates by 0.5%.
2. India's Growth Trajectory: India is projected to grow at 7%-7.2% in FY 2025. The first quarter of FY2025 saw a 6.7% GDP growth year-on-year, slightly lower due to reduced government capital expenditure but still reflecting strong long-term growth drivers.
3. Consumption and Investment:
- Consumption: Private Final Consumption Expenditure (PFCE) grew by 7.4% in Q1 FY 2025, with improved rural and urban demand driven by strong consumption patterns.
- Investment: Gross Fixed Capital Formation grew by 7.5%, showing robust investment despite a reduction in central government capital spending. The construction sector saw notable growth at 10.5%.
4. Manufacturing Sector Performance: Manufacturing continues to grow well with a 7% growth in Q1 FY2025, supported by strong government push.
5. Macro-Economic Stability: Inflation has come down to 3.65%. The exchange rates and interest rates have been relatively stable. The fiscal deficit has significantly reduced from INR 6.1 lakh crores in April-July 2023 to INR 2.8 lakh crores in the same period for 2024. This reduction is driven by higher personal income tax revenues and controlled government expenditure.
6. Strong fund-raising environment: Stock markets are at record highs, and fund raising activities has surged. Mutual fund SIP contributions have doubled from June 2023 to June 2024, reflecting strong domestic investor confidence. FPI debt inflows remain positive, bolstered by the inclusion of Indian government bonds in key indices. Bank credit has grown 15%.
7. Continued growth in service exports: Service exports have slightly surpassed non-oil merchandise exports, indicating a shift in export dynamics. This, along with improved net exports and strong remittances, contributes to economic resilience.
Implementation of reforms, including enhancing ease of doing business, advancing energy transitions, and boosting manufacturing competitiveness, would support long-term economic expansion.
Our latest thinking
FY26 Union Budget: Diversifies stimuli and rethinks fiscal consolidation
FY26 Union Budget shifts focus to consumption with INR1 lakh crore tax relief for households, INR1.5 lakh crore in interest-free loans, and INR4.3 lakh crore in grants.
25 Feb 2025
D. K. Srivastava
Budget 2025: Insights on macro-fiscal implications
Uncover FY26's macro-economic outlook, tax reforms, and policy impacts on India's growth in our post-Budget 2025 podcast. Will GDP exceed 7%? Listen in.
11 Feb 2025
18m 54s
Why Budget 2025 should focus on restoring India’s capex growth momentum
India's FY25 GDP growth forecast at 6.4%, with fiscal deficit to improve to 4.4% in FY26 and a 20% capital expenditure hike. Learn more.
29 Jan 2025
D. K. Srivastava
Budget 2025: Insights on expectations for the manufacturing sector
Explore Union Budget 2025 insights with Ajit Krishnan, EY India Tax Partner, on manufacturing growth, tax incentives, MSME support, and sustainability goals. Tune in now.
24 Jan 2025
11m 55s
Budget 2025: Macroeconomic expectations and policy priorities for FY26
Explore Union Budget 2526 insights with Dr. D.K. Srivastava as he analyzes India's fiscal strategies, tax reforms, and infrastructure priorities. Tune in now!
21 Jan 2025
9m 15s
How LT Foods achieved 2x revenue growth with digital supply chain transformation
LT Foods elevates supply chain transformation and doubles revenue with EY's Asterisk platform, enhancing agility and service in the food market.
24 Dec 2024
EY India
Recasting fiscal responsibility framework: Roadmap to achieve Viksit Bharat
Discover India's new fiscal framework for Viksit Bharat: aiming for 30% debt, 3% deficit norms, and zero revenue deficit to ensure economic stability.
23 Dec 2024
D. K. Srivastava
How India can frame its fiscal architecture to realize Viksit Bharat
Discover the roadmap to Viksit Bharat. Learn about the necessary government size, tax reforms, and fiscal discipline to achieve India's development goals.
27 Nov 2024
D. K. Srivastava
BRICS+ to pave the way for a multipolar currency era
BRICS+ group's rising trade share challenges G7 dominance. Explore the shift towards a multipolar economic system and implications for global currencies.
30 Oct 2024
D. K. Srivastava
Can BRICS+ play a key role in shaping future global economic policy
Explore the impact of G7 and BRICS+ on global economics, their power balance, and cooperation in shaping the world's financial future.
26 Sept 2024
D. K. Srivastava
Understanding AI - How It Is Changing the World of Taxes
Rahul Patni & Divyesh Lapsiwala discuss GenAI's future in tax, its role in enhancing productivity, and evolving tax professions. Tune in now!
04 Sept 2024
14m 22s
Incentive insights: Decoding state incentives in Gujarat
Learn how to decode state incentives in Gujarat with EY's podcast. Unearth new insights & strategies. Listen today!
01 Mar 2024
9m 51s
Budgeting for balancing growth and fiscal discipline
Discover how FY25 Interim budget has struck a fine balance between sustaining growth and achieving fiscal consolidation. Learn more.
22 Feb 2024
D. K. Srivastava
Interim Budget 2024: impact on the macroeconomics of Indian economy
Explore EY's analysis of the Interim Budget 2024's impact on India's economy. Dive deep into macroeconomics! Listen now!
05 Feb 2024
8m 39s
Interim Budget 2024: impact on individuals and India Inc.
Explore EY's deep dive into the Interim Budget 2024's impact on individuals and India Inc. Boost your financial literacy. Tune in now!
02 Feb 2024
9m 56s
Interim Budget 2024: tax navigation, BEPS 2.0 and energy transition
Navigate tax, BEPS 2 and energy transition with EY's analysis on Interim Budget 2024. Enhance your understanding. Listen now!
30 Jan 2024
10m 38s
How FY25 Budget can tackle fiscal imbalances and signal sustainability
Discover how the government should specify its fiscal consolidation strategy in the FY25 budget with a view to meeting the FRBM targets. Learn more about interim budget 2024.
24 Jan 2024
D. K. Srivastava
16th Finance Commission: The benefits of brevity in Terms of Reference
The Terms of Reference (ToR) of the 16th Finance Commission provide it flexibility to define the scope of its work, approach and methodology. Learn more.
26 Dec 2023
D. K. Srivastava
Incentive insights: State incentives for the tourism sector
Know about state incentives boosting India's tourism sector with EY. Decode complex strategies with ease. Start listening now!
19 Dec 2023
8m 52s
How India’s FY25 interim budget could prepare ground for the main budget
Discover the groundwork laid by India's FY25 interim budget, shaping expectations for the main budget. Key insights on economic strategies and policies.
24 Nov 2023
D. K. Srivastava
Incentive insights: Maharashtra IT/ITES Policy and its impact on investment
In this podcast, Bhavesh Thakkar, Partner at EY India's Tax and Regulatory Services shares insights on the policy's coverage, eligibility criteria for incentives, and its unique approach toward incentivizing investments in emerging technologies.
22 Nov 2023
12m 9s
Reaping the demographic dividend
Find out how size and age of workforce of India will play a significant role in its economic growth in the coming years. Learn more about the demographic dividend in India.
11 Apr 2023
EY India
Fiscal consolidation in India: charting a credible glide path
Find out how a reduced fiscal deficit will help India make more investable resources available for the private sector. Learn more about fiscal consolidation in India.
24 Mar 2023
EY India
How Budget 2023 has increased the attractiveness for IFSC, GIFT IFSC
Discover how GIFT (IFSC is expected to play a pivotal role in India’s growth journey. Learn more about Tax Incentives for IFSC Unit - GIFT IFSC
06 Mar 2023
EY India
Union Budget 2023: strict clauses continue to challenge charitable institutions
EY highlights the amendment in charitable trust. Learn more about the Charitable trust amendment in budget 2023.
06 Mar 2023
EY India
EY highlights how Budget 2023 attempts to make the new concessional tax regime more attractive. Learn more about the new and old tax regimes.
06 Mar 2023
Sonu Iyer
How amendments in angel tax will impact companies
In Budget 2023, the scope of angel tax expanded, to cover foreign funding. Learn more about the amendments in angel tax.
06 Mar 2023
KT Chandy
Sunset clauses in India are truly setting
Sunset clauses are commonly utilised in tax and fiscal laws in India (like in tax holidays and regulations for exchange control). Learn more about the sunset clause in India
06 Mar 2023
EY India
How India can fill the credit gap to fuel economic growth
Discover how debt has played a crucial role in driving economic growth. Learn more about credit gaps in India.
22 Feb 2023
EY India
Digitalizing India: a force to reckon with
Discover how digitization in India and its adoption by people, provides India with a unique competitive advantage of not only reducing the cost of doing business.
07 Feb 2023
EY India
How India is emerging as the world’s technology and services hub
Discover how India can become a technology hub in the world. Learn more about it in the latest report India@100.
27 Jan 2023
EY India
How EY can help
-
EY GTA is an intelligent technology platform supporting comprehensive global trade transactions and is a one stop solution for Customs and Foreign Trade Policy compliance.
Read more -
Explore EY India Tax Platform – a cutting-edge digital tax platform delivering streamlined tax solutions, advanced technology, and seamless DST compliance.
Read more
The team
Direct to your inbox
Stay up to date with our Editor's picks newsletter