India's Path to Viksit Bharat: Capitalizing on Critical Minerals

An EY report indicates that India is focusing on increased capital expenditure and rare earth minerals to drive its Viksit Bharat ambition. The report emphasizes that policy measures should balance consumption support with increased capital investment. Building resilience through self-reliance in critical minerals is essential for India's long-term economic growth.

In June 2023, India identified more than 30 critical minerals needed for sectors such as defense, agriculture, energy, pharmaceuticals, and telecom. The National Critical Mineral Mission, set to launch in 2025, aims to tackle these needs. EY underscores the need for collaboration between the public and private sectors and recommends strengthening ties with countries rich in rare earth resources to mitigate supply chain risks.

EY's Economy Watch for May forecasts that India's economic growth will moderate in 2025-26 due to a combination of global and domestic factors. Nonetheless, the report asserts that India remains among the fastest-growing major economies, driven by robust domestic demand, easing inflation, and accommodative monetary policy, which are linked to a potential revival in private investment.

International elements, such as ongoing supply chain disruptions, recent U.S. tariff actions, and global trade uncertainties, contribute to a cautious outlook. EY suggests that India maintain a balanced approach using monetary and fiscal policies to sustain growth. Continuing the current rate cut cycle could bolster consumption and investment.

To sustain economic activity, EY advises reviving public investment's momentum, especially in government capital expenditure, which lost traction in 2024-25. DK Srivastava, Chief Policy Advisor at EY India, states that despite strong medium-term prospects, global headwinds and domestic challenges necessitate supportive fiscal and monetary measures. Over the long term, technology and clean energy sectors are key to sustainable growth, with self-reliance in critical minerals bringing India closer to its Viksit Bharat goals. (ANI)

(With inputs from agencies.)