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India’s economy likely to grow 6.4-6.7% in FY26 on strong domestic demand: CII President
Jul-04-2025

Expressing optimism over India’s growth prospects, the newly appointed Confederation of Indian Industry (CII) President Rajiv Memani has said that the country’s economy is likely to grow 6.4-6.7 per cent during the current financial year (FY26) driven by strong domestic demand, even as geopolitical uncertainty poses downside risks. He made a strong case for simple three-tiered GST rate structure, with essential items attracting 5 per cent, luxury and sin goods at 28 per cent, and the remaining items in the 12-18 per cent bracket. Currently, goods and services tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab.

On India's Gross Domestic Product (GDP) growth, he said factors, including a good monsoon forecast, and enhanced liquidity emanating from the Reserve Bank's cash reserve ratio (CRR) cut, and interest rate reduction will support the country's economic growth. Observing that there are some obvious risks, he said ‘A lot of these relate to external trade risk. I think a lot of them have been factored in, and also there are some upside. So hopefully they should get balanced out... From a CII standpoint, we're looking at 6.4-6.7 per cent growth’. He said risks to growth are evenly balanced, and ‘geopolitical uncertainty’ poses downside risks whereas ‘strong domestic demand’ is an upside.

Regarding the goods and services tax (GST), he emphasised on the need for rate rationalisation. Under GST 2.0, he said ‘we have called for rate rationalisation, especially on products that are consumed by lower income segments. Several products taxed at 28 per cent, including cement, should also be reduced... we believe this will boost economic activity’. He also batted for procedural simplification of GST framework and advocated for the need to build a national consensus on inclusion petroleum, electricity, real estate and potable alcohol in GST.

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