India Anticipates Growth of Over 7% in FY25, Chief Economic Adviser Affirms
Government’s chief economic adviser V Anantha Nageswaran has anticipated that India’s economy would expand by more than 7% in the current fiscal year. The CEA also projected that the economy can sustain growth of more than 6.5%-7% for a decade, supported by investment in physical and digital infrastructure.
“There can always be scenarios in geopolitics that can cause inflation to be more than we expect, but at this point, the baseline scenario is that inflation gradually converges to the mid-point of the target range,” he said.
However, April’s RBI bulletin warned that extreme weather events and prolonged geopolitical tensions could lead to volatile crude oil prices and pose inflation risks.
In an event hosted by the National Council of Applied Economic Research in New Delhi, the CEA said, “The omens are good for us to continue the steady growth rate”.
The CEA added that India’s monetary policy committee is mandated to keep inflation within a target range of 2% to 6% and the central bank, the Reserve Bank of India, wants to see it at 4% before cutting rates.
Nageswaran said the Indian economy was better placed than before to pursue “non-inflationary” growth.
Last month, the RBI in an article titled ‘State of the Economy’ said conditions are shaping up for a sustained increase in real GDP growth, which has averaged over 8% between 2021 and 2024.
RBI deputy governor Michael Patra recently said that India can achieve a growth rate of 10% in the next decade and become the second-largest economy by 2032 and the largest by 2050.
The RBI’s monetary policy committee in its policy on April 6 retained the FY25 projections for real GDP at 7 % and consumer price-based inflation at 4.5%.
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