Current Affairs - Economy

Moody’s has revised India’s GDP growth forecast for FY25 to 7%, a decrease from the 8.2% growth observed in the previous fiscal year. This revision reflects a combination of global and domestic economic slowdowns, including weaker-than-expected performance in key sectors. Despite this forecast, India’s GDP per capita at purchasing power parity increased by 11% year-on-year, indicating a positive trend in the standard of living. The revision aligns with similar adjustments made by other organizations like FICCI and the Asian Development Bank.

The International Monetary Fund (IMF) has reduced India’s FY25 growth forecast to 6.5%, citing challenges like an industrial slowdown. This adjustment aligns with similar revisions by the Reserve Bank of India (RBI) and the Statistics Ministry, which estimate a slightly higher growth of 6.6%. Factors such as a depreciating rupee have impacted inflation and export competitiveness. Globally, economic growth for 2025-26 is projected at a moderate 3.3%, reflecting widespread challenges in maintaining robust growth rates.

India ranks as the 3rd largest start-up ecosystem in the world, with more than 100 unicorns, which highlights the country’s strong entrepreneurial culture. This achievement is further reinforced by the inauguration of the CSIR Innovation Complex (CSIR-IC) in Mumbai by Union Minister Jitendra Singh. The complex serves as a hub for start-up incubation and includes advanced infrastructure to support the growth of start-ups. Additionally, the event featured 50 technology transfers to start-ups, MSMEs, and institutions, encouraging further innovation and development in the sector.

The Union Cabinet approved a significant ₹11,440 crore revival package for Rashtriya Ispat Nigam Limited (RINL), also known as Vizag Steel, to address its financial challenges. The package includes ₹10,300 crore as equity capital and conversion of ₹1,140 crore in working capital loans into preference shares. The revival plan aims to stabilize RINL's operations, improve steel production, and secure its long-term sustainability by modernizing the plant and ensuring a steady supply of raw materials.

The World Bank projects India's economic growth rate at 6.7% for the next two fiscal years (2025–2027), reflecting an increase from the current fiscal year’s growth rate of 6.5%. This solidifies India’s position as the fastest-growing major economy, especially in contrast to a global GDP growth rate of 2.7%. While China’s growth is expected to slow to 4% next year, India's robust performance highlights its resilience and potential in the global economic landscape.