Active Stocks
Fri Dec 08 2023 15:59:53
  1. Tata Steel share price
  2. 129.2 -0.62%
  1. HDFC Bank share price
  2. 1,653.1 1.38%
  1. State Bank Of India share price
  2. 614 0.35%
  1. NTPC share price
  2. 285.25 0.42%
  1. ITC share price
  2. 449.15 -1.95%
Business News/ Economy / India to clock GDP growth of 6.5 pc in FY24, can easily maintain this for next few yrs: Former Niti Aayog VC Rajiv Kumar
Back Back

India to clock GDP growth of 6.5 pc in FY24, can easily maintain this for next few yrs: Former Niti Aayog VC Rajiv Kumar

India's economy will grow at around 6.5% this year, benefiting from government policies, according to former NITI Aayog Vice Chairman Rajiv Kumar. He also emphasised the need for India's economy to grow beyond 8% to meet the demand for new jobs

The Indian economy will grow at around 6.5 per cent in the current fiscal, said former NITI Aayog Vice Chairman Rajiv Kumar.Premium
The Indian economy will grow at around 6.5 per cent in the current fiscal, said former NITI Aayog Vice Chairman Rajiv Kumar.

Benefiting from the policies laid out by the Modi government in past nine years, India's economy will grow at around 6.5 per cent in the current financial year, said former NITI Aayog Vice Chairman Rajiv Kumar on Monday. 

He underlined that the policies made in last nine years have led to a favourable environment for the country's GDP. Rajiv Kumar also added that to match the demand of new jobs for young population, Indian economy needs to grow beyond 8 per cent.

"My growth projection (of India's GDP growth in FY 2023-24) is 6.5 per cent. "And I think we can easily maintain this (growth) over the next few years," he told PTI in an interview. 

In 2022-23, India's GDP grew at 7.2 per cent which was lowern than 9.1 per cent clocked in 2021-22. Reserve Bank of India's projection suggest's India's GDP growth rate to be at 6.5 per cent in the current financial year.

Rajiv Kumar underlined that the present macroeconomic situation of India is getting the advantage of the reforms that have been implemented by the BJP government in the last nine years. "Therefore, both the external macroeconomic balance as well as the domestic ones are in good shape," he told PTI.

Inflation coming down below target levels, govt tax revenues improving

He mentioned India's position on some of the key indicators of the a country's economy. He said that India's current account deficit is manageable, and its foreign exchange reserves are enough to cover around 11 months of imports. He also mentioned that FDI inflows are healthy.

Rajiv Kumar also pointed out towards the cooling inflation in India and improving government tax revenues.

"So, this will take care of the fiscal situation and lead to fiscal consolidation. As a result of this improvement, the rating agencies have improved their ratings and JP Morgan has included India in its international bond indices," he told PTI.

Despite all the factors working favour of India, the government is waiting for a positive response from the private corporate investment, believes Rajiv Kumar. However, with increase in bank credit growth over the last six months, private investment is also starting to improve, he mentioned.

Expressing concern over decline of India's exports between April and August by about 11 per cent compared to the same period last year, he said, "This reflects our age old situation which is that India's export performance is strongly correlated with the global trade performance."

Kumar pointed out that as the global trade has weakened, India's exports performance has also weakened given the weak demand in Europe, the US and other developed economies.

"We have to change this. We must do whatever we can to ensure that our exports have a greater share of world markets," he said.

‘Give reasons of using WPI instead of CPI as GDP deflator’ Kumar on claims of overvaluation of India's growth

Many critics are claiming that India is overstating its economic growth. Responding to the claims, Rajiv Kumar said that the Ministry of Statistics and Programme Implementation (MoSPI) must take a firm position and give enough reasons as to why they are using the wholesale price index (WPI) deflator and not the Consumer Price Index (CPI) as GDP deflator.

"And that needs to be firmly established once and for all," Kumar emphasised.

Meanwhile, India's real GDP growth was 7.8 per cent on a year-on-year basis in Q1 FY24, as per the Income or Production Approach.

Recently, former chief economic advisor Arvind Subramanian, in an article, argued that India's GDP is not measured from the expenditure side and measured only from the income side. This tends to over estimate GDP growth.

Last month, chief economic advisor V Anantha Nageswaran rejected criticism of "statistical discrepancy" in the first quarter GDP data, saying when the same statistical authority reported the severest contraction in the first quarter of 2020, the naysayers had called it credible as it suited their narrative.

The article by Nageshwaran was written in light of debates over India's economic performance and economist Ashoka Mody, a Princeton University professor, raising concerns regarding the country's GDP growth rate for the first quarter of the financial year 2023-24.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 02 Oct 2023, 05:19 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App