Q2 Growth May Have Slowed, But No Major Downside Risk To FY25 Projections: DEA

The Secretary also addressed concerns about rising food prices but emphasised that, apart from this issue, inflation does not pose a substantial challenge to the Indian economy

Regarding capital expenditure, Seth noted that the government’s planned capital expenditure for the current fiscal year may fall slightly short of the Rs 11.11 lakh crore target

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India's economic growth may have experienced a slight deceleration in the September quarter, but there is little indication of any significant downside risk to the projected growth rate of 6.5-7 per cent for the current fiscal year, Economic Affairs Secretary Ajay Seth stated on Wednesday.

Seth acknowledged that while certain goods and services may not have seen the same growth rate in the second quarter as in the previous year, data related to e-way bills and e-invoices does not point to any major risks to the overall growth forecast of 6.5-7 per cent for the full year, as outlined in the Economic Survey.

The Secretary also addressed concerns about rising food prices but emphasised that, apart from this issue, inflation does not pose a substantial challenge to the Indian economy. 

Regarding capital expenditure (capex), Seth noted that the government’s planned capital expenditure for the current fiscal year may fall slightly short of the Rs 11.11 lakh crore target. However, he reassured that the capex would still surpass the Rs 9.5 lakh crore allocated in the previous fiscal year.

"We started the year with estimates in the economic survey of 6.5-7 per cent growth. I don't see any significant downside risk to this... the numbers in the second quarter do indicate that some of the products or some of the services may not be at the same level where they were about a year back or even two quarters earlier,” Seth said at a Ficci event in Delhi.

"But thereafter, you look at some other indicators, especially I am looking at that in terms of the e-way bills or the e-invoices in the month of October, they tell a different number. That does not indicate that there is any significant possibility of any downside risk from 6.5-7 per cent goal that has been estimated at the beginning of the year," Seth added.

The Indian economy expanded by 6.7 per cent year-on-year in the April-June period of FY25. While this represents the slowest growth in the past five quarters, India continues to be one of the fastest-growing major economies in the world.