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New Delhi, Apr 30 (KNN) The Indian Finance Ministry has flagged concerns over the impact of global economic uncertainties on the country’s growth outlook for 2025-26, warning that private investment could take a hit amid prolonged instability.
In its March monthly economic review released Tuesday, the ministry urged India Inc. to move beyond the era of “easy pickings” and embrace innovation and quality to sustain long-term growth.
“More than trade, the perception of prolonged uncertainty may cause the private sector to put its capital formation plans on hold,” the report stated. It emphasized that coordinated action between policymakers and the private sector is critical to avoid a self-perpetuating cycle of economic hesitation.
The review stressed that this is an opportune moment for the private sector to invest in product differentiation and capacity building.
In the face of growing global complexity, the report said, action and execution now carry greater weight than in normal times, creating an environment ripe for bold investment decisions.
It also underlined the importance of policy support in removing regulatory hurdles, improving logistics, and easing compliance, which are now more urgent than ever.
According to the ministry, public policy and regulatory measures must be deployed not just to facilitate but also to actively encourage private sector investment.
Despite global trade tensions and geopolitical risks, the ministry expressed optimism about India’s prospects.
It recommended diversifying trade into untapped markets and strengthening domestic manufacturing capacity through strategic reforms, arguing that such steps could help India weather external shocks and emerge stronger.
The report also noted an improved inflation outlook, with food and crude prices falling. This, coupled with a likely rate cut, bodes well for consumption and investor confidence.
The ministry further emphasized that a prudent public debt path—especially if states also reduce their debt levels—could unlock more resources for private sector growth.
“Overall, the outlook for the Indian economy appears positive,” the review concluded, highlighting India’s resilience amid a turbulent global landscape. Growth continues to be supported by easing inflation, strong consumption demand, fiscal discipline, a stable labour market, and a robust financial sector.
(KNN Bureau)
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