With Central Statistics Office (CSO) pegging the advance GDP growth estimate for 2024-25 at 6.4 per cent, there is palpable concern about growth momentum slowing down. businessline caught up with CII President Sanjiv Puri to get his take on the growth forecast, industry performance and chamber’s expectations for Budget. Excerpts:

What is your reaction to the CSO advance estimate of 6.4 per cent GDP growth for 2024-25?

Despite the global situation, this projected GDP number of 6.4 per cent is a “decent” number. The numbers also indicate that second half will be better, which is a positive. From a macro perspective, we are on a good wicket. There are many sectors such as agriculture, hospitality, real estate, services that are doing well. Agriculture can do even better, but it is doing much better. Overall starting from a good foundation

How do you see 2025 for the economy?

I think 2024-25 overall should be better. We are saying 6.4 per cent here and it should be in region of 7 per cent plus minus next fiscal. This fiscal we at CII are at 6.4-6.7 per cent. 

From a window of policy reforms, what we have done in last several years has been right, it has put us in better wicket and laid a stronger foundation. Otherwise, we wouldn’t have done what we have in the global context. It’s a question about next set of reforms. Many reforms require States cooperation. That is why we have suggested in our Budget recommendation there is need create institution reform on the lines of GST Council to handle areas of — land, labour, power and agriculture. 

What about agriculture? Are you thrilled about the new forecast of 3.8 per cent?

The growth forecast number is good. It can be better. I would be thrilled when it is 6-7-8 per cent. I am happy but not thrilled. Agriculture is one of the reasons why second half will be better. At the same time, agriculture is very vulnerable to climate change. 

There is a need to build resilience in area of agriculture. CII is suggesting creation of national mission on adaptation and agricultural resilience. Also there is need for a mission on water security.

How do you see manufacturing and mining slowdown projected in the advance estimates?

In the second quarter, new project announcements by private sector are significantly higher than the comparable quarter last year. It can be even faster, even better if the global situation was better. Consumption in India has been a little muted which is reflected in corporate results. I think once public capex picks up, it will also give impetus to sectors that are linked to infrastructure. Another point to note is order book of capital goods industries are healthy. This is an indication that investments are going to happen. Public capex will crowd in private investments. As demand situation, it will provide impetus.

We have seen significant revival of manufacturing with multiple initiatives that government has taken over several years. After a long time, we see manufacturing looking up. We need to take the learnings from electronics, renewable energy and implement in other sectors. We are recommending targeted interventions in labour intensive industries such as garment and footwear. We need sector-specific interventions. For example, tourism can be growth enabled by giving infrastructure status and that will get them access to capital. There are sectoral issues and PLI.

Also MSME needs to be strengthened through ECLGS 5.0. We need next ECLGS 5.0. 

What are the three top interventions you will expect in upcoming Budget?

First, Budget should ramp up capex spending by 25 per cent and not compress fiscal glide path. It should provide roadmap of aligning fiscal consolidation with medium term debt to GDP. 

Second is there has to be targeted intervention in employment intensive sectors. 

Third is take measures to boost consumption in the economy via tax cuts, MGNREGA wage hikes etc. 

If I can add a fourth element, it should be the focus on adaptation and water security on a mission mode. Budget should have continuity of approach seen in last several years, building on growth of the economy. 

What about rupee? Do you expect RBI to initiate monetary easing at upcoming MPC meet in February?

RBI has been astute on rupee management. I think they will continue to manage it in the best possible way. I think they should do it. CII advocates for delinking food inflation from inflation targeting framework. Food inflation is so sticky. Food inflation is because of weather events. For food inflation, we have to work on agri resilience.

CII expectation is RBI should go in for 50 basis point cut. That would be good. Maybe atleast 25 in February. Some monetary easing is the need of hour.

Any comment on how India should handle tariff level changes likely to be introduced by Trump Administration in US?

I don’t want to comment or speculate on Trump administration moves. There is lot of conjectures there.