Indian Economy Poised For 6.5-7% Growth In FY 2024-25, Says CEA

Nageswaran highlighted that the country's current account balance shows no vulnerabilities, with domestic financial markets and the banking system in robust health

He also underscored the importance of increasing women's participation in the workforce and emphasised the need for safe and secure workplaces

Source : PTI

The government's chief economic advisor (CEA), V. Anantha Nageswaran, announced on Friday that the Indian economy is projected to grow between 6.5 per cent and 7 per cent in the current financial year under steady-state conditions. Given the current global economic climate, he stressed that the growth rate of the Indian economy is impressive.

Speaking virtually at an event hosted by the Bengal Chamber of Commerce and Industry (BCCI), Nageswaran noted that while the economy is expected to expand by 6.5 per cent in real terms, the nominal growth rate, factoring in inflation, is anticipated to reach 11 per cent.

"The Indian economy is poised to remain the fastest growing in the current financial year with a growth rate of 6.5-7 per cent on a steady state basis. This is a very good achievement in the current global context," Nageswaran said.

He noted that although the world is grappling with medium-term uncertainties and global trade has slowed significantly, India's post-COVID recovery is now firmly established, thanks to the government's carefully calibrated fiscal and monetary policies. "Post-COVID recovery in India is cemented due to prudent macro-economic management, which laid the foundation of economic growth with stability," he said.

Nageswaran highlighted that the country's current account balance shows no vulnerabilities, with domestic financial markets and the banking system in robust health. "The macro indicators signal stability. There has been a massive shift in capital expenditure, declining external debt to GDP ratio and lower retail inflation," he stated.

He highlighted that these factors upgraded the country's credit rating, noting that the economy's supply-side capabilities have improved, helping to keep inflation in check. "All these will help maintain a steady growth rate over the next several years. And India needs to find domestic sources of growth," the CEA remarked.

To achieve this, he pointed out the need for productive employment generation, food security, reduced regulatory hurdles for MSMEs, and more efficient allocation of financial resources. Nageswaran stressed that the MSME sector is vital for non-farm job creation, and small and medium enterprises must scale up to larger firms to absorb more labour.

He also underscored the importance of increasing women's participation in the workforce and emphasised the need for safe and secure workplaces. Regarding artificial intelligence (AI), Nageswaran cautioned that it could potentially displace jobs, stating, "An appropriate balance has to be struck between technology and labour, keeping the social responsibilities in mind.”