New Delhi [India], December 5 (ANI): V Anantha Nageswaran, the Chief Economic Advisor (CEA) of India on Thursday expressed confidence in the growth of the Indian economy. Speaking at the Assocham’s Bharat @100 Summit, the CEA said that if you look at the checklist the Indian economy is in good health.
“If you run through the checklist for Indian economy, the health is pretty robust. Whether it is external debt as the share of GDP, whether it is the non-performing assets in the banking system and then coming to the bottom left, the overall inflation rate If you look at the first seven months of the year in the last several years overall headline Inflation is well-behaved,” CEA Nageswaran stated.
He further added that there are some specific food items that are contributing to the sharp rise in inflation but it is confined to a very small percentage of the overall consumer price index basket of goods and services.
Talking about the fiscal balance and capital expenditure Nageswaran said it has improved over the last seven years.
“The orientation of fiscal expenditure in the last seven years or so has improved towards more of Capital expenditure and less of revenue expenditure as a proportion,” he said explaining the continued performance of the Indian economy.
On concerns of slowing down of the economy, the CEA said erratic monsoon and excessive rainfall did hamper some economic activity in the second quarter.
For context, India’s GDP growth has disappointed expectations, with the economy growing by just 5.4 per cent in the July-September quarter of FY2024-25, significantly below the Reserve Bank of India’s (RBI) forecast of 7 per cent.
This slower-than-expected growth has raised concerns among economists, who are now adjusting their projections for the rest of the year.
Going further, CEA Nageswaran stated, “I think in reacting to this number, we should not throw the baby out with the bot water, because the underlying growth story, still remains very much intact.”
He highlighted that India’s capital formation, that is investments by businesses by government etc. and public sector enterprises was 27.3 percent of GDP by the end of the second decade and now it has improved to 30.8 per cent.
He added, “Three and a half percentage points of GDP improvement while private consumption has held up and exports also have picked up in this very challenging global environment.
He said that if you take services and manufacturing together, India’s total exports as a percentage of GDP is as GDP is even higher than exports as a percentage of its GDP for China.
“But remember when I talk about second quarter, we shouldn’t over interpret these number. It’s also because second quarter did see a spike in the global uncertainty index and supply chain, pressures also intensified, and that is going to be the case because you saw lately announcements by China and anticipating Some trade measures from the United States restricting, Imports of some critical minerals and rare earths etc. so, I think these factors are going to stay with us,” he added explaining the adversities during the second quarter which impacted the growth for the quarter. (ANI)
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