Home / Economy / India economy likely to grow 6.5%-7% next fiscal year: Sanjeev Sanyal

Giving a higher estimate than some economists, Sanjeev Sanyal, a member of Prime Minister Narendra Modi's economic advisory council, on Thursday said the Indian economy is expected to grow 6.5% to 7% in the next financial year if the global environment does not worsen.

Amid slowing global growth, international agencies including the S&P Global Ratings has cut India's economic growth forecast for the ongoing fiscal by 30 basis points to 7%.

Meanwhile, International Monetary Fund and the World Bank have projected the country's growth to be 6.1% and 6.0%, respectively, next financial year.

Speaking to Reuters, Sanyal said India will continue to maintain macroeconomic stability, despite a "very difficult" global environment, helped by the stable banking sector and buoyant tax revenue collections.

"I think we are now on stream to achieve somewhere slightly short of 7% GDP growth rate for this financial year," the economic advisory council member said, which is in line with projection by the Reserve Bank of India.

India's GDP growth

Gross domestic product (GDP) growth for July-September was reported at 6.3%, matching the central bank's own forecasts.

Post the release, the government's chief economic advisor V Anantha Nageswaran also said that GDP growth for the full fiscal year, which ends on 31 March, is likely to be 6.8-7%.

India's fiscal year starts on 1 April and runs through 31 March.

Earlier in 2022, economists had cut their projections for India's growth in fiscal 22-23 to around 7% due to slowing exports and risks of high inflation crimping purchasing power.

Despite that, the Asian nation will likely remain the second-fastest growing economy –lagging only Saudi Arabia– among G20 countries in the current fiscal year, as per the Organisation of Economic Co-operation and Development.

Sanyal further said that India's supply side is capable of growing further and the manufacturing sector will need support from external demand, which is presently weak.

He added that medium-term demand prospects are good, with private-sector investments beginning to show in the domestic economy.

Slowing global growth, however, has started to hurt exports, which fell nearly 17% year-on-year in October, as per the government's official data.

An "invest-and-export" approach will further drive the economy, Sanyal said.

The nation plans to position itself in global supply chains, in part by negotiating free-trade pacts with developed countries, incentivising local production, and strengthening physical infrastructure, Sanyal noted.

Recently, India had finalised a trade pact with Australia, which will come into force on 29 December, and is in advanced negotiations with Britain, among others. India has also agreed to resume discussions with the Gulf Cooperation Council.

With agency inputs

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