India’s economy is set for significant growth, with employment opportunities expected to rise, according to the Asian Development Bank (ADB). In its latest report, ADB highlights that the Indian government’s recent employment-related incentives for workers and companies are likely to boost demand for labor in the coming years. This could bring relief to many young job seekers across the country.
Government Policies to Boost Job Creation
The ADB report sheds light on how the government’s initiatives are aimed at encouraging job creation. These policies, designed to incentivize companies and workers, are expected to lead to a rise in employment demand in various sectors, particularly in industry and services. The report suggests that the effects of these measures will be felt as early as the next financial year.
The demand for labor will be further supported by strong export performance, particularly in the services sector, which continues to drive India’s growth story. Remittances from Indians working abroad are also helping stabilize the economy, reducing the current account deficit (CAD).
GDP Growth Steady at 7% for 2024-25
ADB has maintained its forecast for India’s GDP growth at 7% for the fiscal year 2024-25, which ends in March 2025. According to ADB, India’s economic performance is expected to strengthen in the coming quarters, fueled by better agricultural output and increased government expenditure. ADB’s prediction aligns with the Reserve Bank of India’s (RBI) estimate of 7.2% GDP growth for the same period.
In the first quarter of FY 2024-25 (April to June), GDP growth was slightly lower at 6.7%, but ADB remains optimistic that the agricultural sector’s strong performance will lead to an uptick in the economy. Rural spending is expected to increase due to ongoing agricultural reforms, further driving demand for goods and services.
Inflation and Exports: Mixed Outlook
While ADB expects higher inflation in the current financial year due to rising food prices, it forecasts that inflation will ease in the next financial year. As for exports, India’s services sector is set to see an improvement, contributing significantly to the overall economic growth. However, merchandise exports may experience slower growth in the coming year.
Private consumption is also expected to rise, driven by a combination of robust urban demand and increased rural spending, thanks to favorable monsoon conditions and strong agricultural output. Although public capital expenditure has been high, it may slow down slightly in the next fiscal year as private investment strengthens.
A Strong Economic Future
ADB India Director Mio Oka remarked on India’s impressive resilience in the face of global challenges, noting that the country’s economy is on track for stable growth. India’s ability to navigate tough geopolitical conditions, coupled with its strong industry and service sectors, positions the nation for continued success in the years ahead.
With above-average monsoon forecasts and a positive outlook for both rural and urban consumption, India’s economic momentum appears to be in full swing.
