India poised to become world’s 4th largest economy by 2026; GDP to grow 6.8% in FY25: PHDCCI | Read

India’s economy is expected to become the fourth largest in the world by 2026, surpassing Japan, said industry body PHDCCI on Wednesday, as it projected the nation’s GDP to grow 6.8 per cent in the current financial year ending March and 7.7 per cent in FY26.

With the Indian economy growing resiliently over the past three years, it is expected to become the fourth largest economy in the world by 2026, surpassing Japan, said Hemant Jain, President, PHD Chamber of Commerce and Industry.

Ahead of the Budget, the industry chamber also said the peak rate of income tax, which is currently applicable at 30 per cent on income above Rs 15 lakh, should be applied only to individuals having income above Rs 40 lakh, whereas the income tax exemption limit should be increased to Rs 10 lakh, arguing that boosting consumption through more disposable income in the hands of people is essential.

Besides, the PHD Chamber of Commerce and Industry (PHDCCI) expects the Reserve Bank to slash the benchmark interest rate by 25 basis points in its policy review next month, with the Consumer Price Index (CPI) inflation expected to reduce significantly.

Moreover, PHDCCI has suggested that the tax rate on entities under proprietorship or partnership and LLP, which is currently 33 per cent, should be 25 per cent.

In a statement, the chamber said the Indian economy stands as a beacon of resilience amidst the background of global volatility and challenges.

“While many of the world’s leading economies are grappling with slowing growth, India has demonstrated remarkable progress, fuelled by solid macroeconomic fundamentals and proactive government reforms,” it stated.

Projecting that the inflation trajectory is expected to be around 4.5 per cent for the current fiscal year (FY2024-25), PHDCCI said, looking ahead, India should focus on promising sectors such as agriculture and food processing, fintech, semi-conductor, renewable energy, health and insurance, and a commitment to sustainable development.