High probability of India's GDP growth touching 8% for FY24: Chief Economic Advisor

Government's Chief Economic Advisor V Anantha Nageshwaran has said that there is a high possibility of India’s economic growth touching 8% in FY24. He further said that India would record 7% or higher growth for the fourth consecutive year in FY25 and lot of it would depend on the monsoons

"Right now, the expectations are that we will have an above-normal monsoon. But, spatial and temporal distribution (of rainfall) will matter," the CEA said

India's GDP growth

While speaking at an event in New Delhi, the CEA said that 6.5-7% growth rate was expected to continue in the coming years and it was important to maintain it. Earlier, on February 29, Nageshwaran had said that the country's continued out-performance was making a case for international organisations to raise their estimates of India's potential growth rate to 7% or even higher.

In the december quarter, India's GDP grew at 8.4% which was the highest in the last six quarters. The third quarter uptick was propelled by a double-digit growth in the manufacturing sector, with construction not too far behind, growing at 9.5%.

Following this the National Statistical Office revised its GDP growth estimate for FY24 from 7.3% to 7.6% and the RBI estimated the growth at 7%, while the International Monetary Fund (IMF) projects it at 6.8%.

On inflation, Nageshwaran said that he doesn't foresee any significant upside risk to inflation at the moment and expects retail inflation to remain within the midpoint of the RBI's target range of 2-6% in FY25.

"There can always be scenarios on the geopolitical front that can cause inflation to be more than what we expect. But at this point, our baseline scenario is that inflation gradually converges towards the midpoint of the target range in FY25," he added.

Nageshwaran also highlighted the need for growth in the small and medium enterprises (SMEs) to increase the share of manufacturing in the country's overall GDP

"Building blocks such as supply-side infrastructure, physical connectivity, digital connectivity, and financial inclusion are good work in progress," he said. “But apart from these, ultimately, the compliance burdens and inspection burdens that businesses face at the subnational government level need to be addressed to grow the manufacturing share of GDP."

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