ADB projects India’s GDP growth in 2024-25 at 7% Most Indians believe in plurality: survey

Retail inflation to ease to 4.6% this year and food inflation to cool to 5.7% if farm output returns to usual, says lender; revival expected in rural consumption, but exports, FDI inflows still seen muted

India’s economy is expected to remain robust over the next two years, even though headline growth in the country’s Gross Domestic Product (GDP) is forecast to slow from 7.6% in 2023-24 to 7% this year, before improving to 7.2% in 2025-26, the Asian Development Bank (ADB) said.

As per its Asia Development Outlook report released on Thursday, the bank expects retail inflation to ease to 4.6% this year and 4.5% in 2025-26. India’s “persistent” food inflation is expected to drop to 5.7% as farm output returns to normal trends this year.

With the U.S. reporting a resurgence in inflation in

March, dimming prospects of much-anticipated interest rate cuts from the Federal Reserve, the ADB noted that a ‘higher for longer’ interest rate regime would have some impact on Asia’s inflation outlook, with a slightly smaller dent in growth.

However, this impact would be “more pronounced and persistent” for India, given the higher sensitivity of its inflation pace to exchange rate fluctuations, and its greater reliance on imported goods, it said. Moreover, if the spike in shipping costs triggered by the strife in the Red Sea persists, it could add to inflation pressures across developing Asia.

A projected normal monsoon this year will also help revive rural consumption, which was muted last year due to erratic rainfall affecting the farm sector, with greater demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act scheme signalling the resultant stress.

“In India, growth is forecast to remain strong as rising consumption complements continued investment growth,” said Abdul Abiad, director of ADB’s macroeconomics research division. As India accounts for 80% of South Asia’s GDP, it is still the fastest-growing sub-region with improving domestic demand as prices moderate in most economies, he noted.

An overwhelming number, 79% of those surveyed in the CSDS-Lokniti poll aver that “India belongs to all religions equally, not just Hindus”, with only 11% saying that “India belongs only to Hindus”. This belief in plurality was more pronounced in urban areas (85% in towns and 84% in cities) and higher among the educated (83%) as compared to those with no schooling (72%).

Yet, while only 8% of the respondents said the Ram Mandir was their most important concern, 22% of them mentioned this as the “most liked action” of the BJP-led government. Fortyeight per cent of the respondents also expressed the belief that the construction of the Ram Mandir in Ayodhya will consolidate Hindu identity.

The survey also revealed that 58% of the respondents expressed some or great distrust in the Election Commission. Nearly 45% suggested the likelihood that electronic voting machines could be manipulated by the ruling party, a lot or somewhat.

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