India is poised to achieve a 7 per cent 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 a stable economic trajectory, with an expected growth rate of 6.4- 6.7 per cent in the current financial year (FY25). Amid geopolitical tensions and disrupted global supply chains, India has emerged as a bright spot in the global economic landscape, says the survey.
It attributes the resilience to the government’s sound economic policies, particularly its emphasis on public capital expenditure led growth, which has effectively revitalized the economy.
The pan-India survey, conducted over the past month, reveals a strong sentiment for private investments, with 75 per cent of respondents affirming the current economic environment as conducive for such investments. Nearly 70 per cent of the surveyed firms expressed intentions to invest in FY26, signaling an uptick in private investments in the coming quarters. Increased public capex and structural reforms have been instrumental in creating a favorable investment climate.
Employment: A central pillar of growth
Employment generation has been a key focus area, aligning with India’s vision of a Viksit Bharat by 2047, says the survey. It discloses encouraging trends in job creation in FY25 and FY26 with approximately 97 per cent of firms plan to increase their workforce in the next two years. The recent hiring trends have been positive as over the past three years, 79 per cent of firms reported adding more employees. Direct employment is expected to grow by 15 to 22 per cent driven by manufacturing and services sectors. Indirect employment is forecasted to increase by approximately 14 per cent.
The sector-wise employment insights shows manufacturing firms anticipate a 10-20 per cent rise in employment, highlighting the sector’s recovery and growth potential. A similar employment growth is expected in the services sector 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. It points out that, senior management and supervisory roles take longer to fill, averaging 1-6 months. However regular and contractual positions are filled more quickly, underscoring a gap in
high-level skilled staff.
Wage growth will boost consumption
Rising wages are expected to fuel domestic consumption, a critical driver of economic growth. In FY24 and FY25 40-45 per cent of firms reported wage growth across all levels with senior management wages increasing by 10-20 per cent. Similar wage hikes were observed in managerial and supervisory roles. The survey says that, regular workers benefitted from comparable wage increases, reflecting broader economic growth.
The CII survey is based on responses from 300 firms, encompassing large, medium, and small enterprises. It underscores optimism on India’s economic prospects, with private sector participation playing a pivotal role in sustaining growth. The GDP growth will stabilize at 6.7% in Fy25, followed by projected 7 per cent rise in FY26, says the survey. ANI
