India’s Q2 Growth Slows to 5.4% Ahead of Union Budget 2025-26

New Delhi, Dec 30 (KNN) India’s economic growth decelerated to an unexpected 5.4 per cent in the second quarter of FY25, sparking discussions among economists about the need for targeted reforms in the upcoming Union Budget 2025-26.

Key drivers of this slowdown include weak capital formation, subdued consumption, and adverse weather conditions, highlighting vulnerabilities in the nation’s economic framework.

This downturn has raised concerns, especially as India seeks to maintain its position as a rapidly growing economy amidst global uncertainties.

The lacklustre growth underscores the urgent need for measures that not only stabilise the economy but also reignite the momentum across critical sectors like consumption and manufacturing.

Economists, including Rumki Majumdar, emphasise the importance of prioritizing skill development and employment generation in the forthcoming budget.

“We anticipate the government will continue to prioritize and enhance efforts towards skill development and employment generation, maintaining the positive momentum. This would help harness the demographic dividend, drive economic growth from both supply and demand sides, and boost consumption through higher incomes,” Majumdar stated.

Experts believe the budget should focus on policy initiatives that stimulate domestic demand while addressing structural challenges in manufacturing.

Enhancing public investment in infrastructure and creating a conducive environment for private sector participation could also play a crucial role.

Simultaneously, targeted interventions in rural development and agriculture may be necessary to mitigate the adverse effects of erratic weather patterns.

To revive consumer confidence, measures to enhance disposable incomes, such as tax reliefs or social welfare programs, could be instrumental.

Encouraging manufacturing growth through incentives, streamlined regulations, and fostering innovation are additional steps that could spur job creation and economic activity.

With the Union Budget 2025-26 approaching, all eyes are on policymakers to craft a strategy that addresses the current economic slowdown while laying a foundation for sustained, inclusive growth.

The budget represents a critical opportunity to realign priorities and set India back on its high-growth trajectory.

(KNN Bureau)

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