CII Forecasts 7% GDP Growth for India in FY26, Driven by Private Investments and Employment Growth

New Delhi: India is poised to achieve a 7% growth rate in FY26, driven by rising private investments and employment generation, according to a recent survey conducted by the Confederation of Indian Industry (CII).

The survey highlights India’s stable economic trajectory, with an expected growth rate of 6.4% to 6.7% in the current financial year (FY25).

India: A Bright Spot in the Global Economy

Amid geopolitical tensions and disrupted global supply chains, India has emerged as a bright spot in the global economic landscape.

The CII survey attributes this resilience to the government’s sound economic policies, particularly its emphasis on public capital expenditure (capex)-led growth, which has effectively revitalized the economy.

Private Investments on the Rise

The pan-India survey, conducted over the past month, reveals a strong sentiment for private investments, with 75% of respondents affirming the current economic environment as conducive for such investments.

• Investment Momentum for FY26: Nearly 70% of surveyed firms expressed intentions to invest in FY26, signaling an uptick in private investments in the coming quarters.
• Driving Forces: Increased public capex and structural reforms have been instrumental in creating a favorable investment climate.

Employment Growth: A Central Pillar of India’s Vision

Employment generation has been a key focus area, aligning with India’s vision of a “Viksit Bharat” (Developed India) by 2047. Encouragingly, the survey shows promising trends:

• Job Creation in FY25 and FY26: Approximately 97% of firms plan to increase their workforce in the next two years.
• Recent Hiring Trends: Over the past three years, 79% of firms reported adding more employees.
• Projected Growth:
  • Direct Employment: Expected to grow by 15% to 22%, driven by manufacturing and services sectors.
  • Indirect Employment: Forecasted to increase by approximately 14%.

Sector-Wise Employment Insights

• Manufacturing: Firms anticipate a 10-20% rise in employment, highlighting the sector’s recovery and growth potential.
• Services: Expected to see similar employment growth, further bolstering economic activity.

Challenges in Filling Vacancies

While the survey paints a positive picture, it also sheds light on challenges in skilled manpower availability:

• Senior management and supervisory roles take longer to fill, averaging 1-6 months.
• Regular and contractual positions are filled more quickly, underscoring a gap in high-level skilled staff.

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Wage Growth: Boosting Personal Consumption

Rising wages are expected to fuel domestic consumption, a critical driver of economic growth.

• FY24 and FY25 Trends: 40-45% of firms reported wage growth across all levels:
  • Senior Management: Wages increased by 10-20%.
  • Managerial and Supervisory Roles: Similar wage hikes were observed.
  • Regular Workers: Benefitted from comparable wage increases, reflecting broader economic growth.

CII Survey Highlights

The findings are based on responses from 300 firms, encompassing large, medium, and small enterprises. The survey underscores optimism about India’s economic prospects, with private sector participation playing a pivotal role in sustaining growth.

Key Takeaways

• India’s growth is expected to stabilize at 6.4%-6.7% in FY25, with a projected rise to 7% in FY26.
• Public and private investments are key drivers of this growth.
• Employment generation remains a cornerstone of economic policies, with significant job creation across sectors.
• Wage growth and skilled workforce availability are critical to sustaining momentum.