Finance Ministry on Friday endorsed the RBI’s assessment of the economy in the latest monetary policy review, noting that central bank upping the GDP growth estimate to 7 per cent this fiscal was good move.
“Seven per cent is a good assessment of economy by RBI. High Frequency indicators for first two months of H2 are encouraging. Fully agree with RBI assessment of economy,” Ajay Seth, Secretary, Department of Economic Affairs in Finance Ministry said at the CII-DEA organised Global Economic Policy Forum 2023.
Seth said the Centre was hopeful of meeting the fiscal deficit target of 5.9 per cent of GDP for current fiscal.
He also highlighted that there is good momentum in economy in investments, construction etc.
Meanwhile, speaking at FICCI’s 96th Annual General Meeting on Friday, V Anantha Nageswaran, Chief Economic Advisor in Finance Ministry, highlighted that the range of outcomes RBI had for GDP is relatively narrower, but for inflation it (range of outcome) is much wider.
This means RBI is far less uncertain about India’s GDP growth and the central bank is relatively more uncertain about inflation relative to its baseline projection.
“RBI is relatively surer of growth outcome in India this year and next year”, Nageswaran said.
RBI on Friday raised the current quarter GDP growth to 6.5 per cent against 6 percent estimate earlier. For January-March 2024 quarter, the growth estimate has been upped by RBI to 6 per cent from 5.7 per cent. For the entire fiscal 2023-24, GDP growth estimate has been raised by RBI to 7 per cent from 6.5 per cent earlier.
This RBI move to raise GDP growth forecast to 7 per cent comes on the heels of stellar Q2 GDP growth performance of 7.6 per cent, which took several policy makers, economists and economy watchers by surprise.