Leading industry chamber FICCI on Thursday projected an annual median GDP growth forecast for the year 2024-25 at 7 per cent, adding that Union Budget 2024-25 should focus on taxation reforms, employment generation, innovation and sustainable development.

According to the FICCI's 'Economic Outlook Survey' results, median GDP growth is estimated at 6.8 per cent and 7.2 per cent in Q1 2024-25 and Q2 2024-25, respectively.

The survey put the median growth forecast for agriculture and allied activities at 3.7 per cent for 2024-25.

"This marks an improvement vis-a-vis growth of about 1.4 per cent reported in the year 2023-24. Ebbing El Nino effects with the expectation of a normal southwest monsoon are likely to bode well for agricultural production," said the apex industry body.

Industry and services sector, on the other hand, are anticipated to grow by 6.7 per cent and 7.4 per cent respectively in the current fiscal year.

Further, the median forecast for CPI-based inflation has been put at 4.5 per cent for 2023-24, with a minimum and maximum range of 4.4 per cent and 5 per cent, respectively.

"While food prices remain sticky with inflation inching up in cereals, fruits and milk, the survey participants expect an easing of prices in the second quarter with kharif output reaching the market," said FICCI.

The policy repo rate is forecasted to moderate to 6 per cent by the end of the fiscal year 2024-25 (March 2025), according to the economists.

On the subject of fiscal management and expenditure, the participating economists mentioned that the government has done a deft job on the fiscal side.

"It is expected that such prudence will continue as it is important to ensure macro-economic stability. According to economists, the government has an opportunity to leverage additional resources from robust tax collections and Reserve Bank of India's dividend transfer," the FICCI survey report mentioned.On capital expenditure, it was pointed out that the target could be increased but not much deviation was expected from the Rs 11.1 trillion figure that was indicated in the interim budget for FY2025.

The surveyed economists expected some reforms on the taxation side aimed at stimulating economic growth.

"Potential revisions in tax rates to boost disposable income and stimulate consumption, particularly for lower income brackets, is anticipated," they said.

Further, it was suggested that enhancing limits under Section 80C and similar provisions could encourage long-term savings and investment. Simplification of the capital gains tax regime and a framework guiding towards streamlining of GST slabs are also expected, the report mentioned.

The economists indicated that the forthcoming budget is expected to introduce comprehensive measures to boost employment and enhance workforce capabilities.

The announcement of an employment-linked incentive scheme, the introduction of an urban counterpart of Mahatma Gandhi National Rural Employment Guarantee Act, increased investments in labour skilling programmes and soft infrastructure, and the implementation of targeted policies and support systems to increase female labour force participation were some of the suggestions highlighted by the surveyed economists.

--IANS