NEW DELHI, Jan 18 (The CONNECT) – Despite sluggish demand and high inflation, the PHD Chamber of Commerce and Industry (PHDCCI) expects the economy to grow to a size of more than USD 4 trillion in FY 2024-25 and grow to USD 5 trillion in FY 2026–27.

A PHDCCI delegation led by its President Sanjeev Agrawal today met Dr. V. Anantha Nageswaran, Government’s Chief Economic Advisor, and appreciated that India’s outperforming with a growth rate of 9.1% in 2021–22 and 7.2% in 2022–23 and 7.3% in 2023-24 according to NSO advance estimates.

To strengthen the high growth trajectory of the Indian economy, the industry body discussed the various developments in the arena of trade and industry; the issues related to MSMEs, demand trajectory, particularly urban and rural demand; the incidence of taxation on the middle class; ease of doing business in factories; and growth of the rural economy, among others.

PHDCCI, however, submitted that demand has been observed in the sluggish mode since the last many quarters impacted by high inflation.

It said that inflation impact is very high, affecting disposable incomes, particularly in the rural segments.

The industry body suggested a significant relief in direct taxation as peak rates of 30% is imposed on the middle-income levels of 15 lakh.

The rationalisation of taxation for the middle income will have a positive impact on aggregate demand and to enhance the tax base in the country, said PHDCCI.

The industry body suggested supporting rural enterprises such as micro and small enterprises in the rural segments so that employment opportunities are created and rural incomes are enhanced to support the growth at higher levels.

Moreover, PHDCCI appreciated the consistent growth of the agriculture sector at more than 3% and suggested further reforms to strengthen the agricultural sector to support the food processing industry to generate more employment opportunities, with extended agriculture infrastructure.

The other members of the delegation included Hemant Jain, Senior Vice President, PHDCCI; Saket Dalmia, Immediate Former President, PHDCCI; Dr. S P Sharma, Chief Economist Deputy Secretary General, PHDCCI, and Suresh Chandra Joshi, Joint Secretary and Head Protocol, PHDCCI.