Finance Ministry does not see any significant downside risk to the earlier 2024-25 growth assessment of 6.5-7 percent projected in this year’s Economic Survey, Ajay Seth, Economic Affairs Secretary, said on Wednesday.

This is even as the Senior Finance Ministry official acknowledged some slowdown in certain goods and services in the just ended September 2024 quarter (Q2).  

“Some slowdown is there in some sectors. However if you were to look at other indicators such as e-way Bills and e-invoices in October, they tell a different story. That does not indicate we have a significant  possibility of any downside risks from 6.5-7 percent growth estimated in beginning of year,” Seth said at a curtain raiser event to FICCI’s 97th AGM and Annual Convention in the capital.

“We started the year with estimates of 6.5-7 percent GDP growth in the economic survey. I see that we are very much still in that zone. I don’t see any significant downside risks coming to that”.

Seth, however, declined to go into specifics on whether or not he sees the final economic growth number coming close to 6.5 percent or to 7 percent.

Seth also said that the Finance Ministry will in the next few months operationalise the ₹ 1 lakh crore Anusandhan National Research Fund for basic research and prototype development and set up a mechanism for spurring private sector-driven research and innovation at commercial scale.

At the curtain raiser event, top Secretaries from Ministries of Defence, Textiles, Steel and MeitY expressed confidence that the economy is well positioned to achieve greater milestones this decade as it moves forward in its journey of ‘Viksit Bharat’ (developed country) by 2047.

Capex undershooting 

On government capital expenditure, Seth sought to allay concerns of the Budget estimates of ₹11.1 lakh crore for 2024-25 not being met given the somewhat tardy progress so far. 

“There may be some undershooting of capex. I don’t see this as a major issue. But I do expect an increase over last year’s capex level of about ₹9.5 lakh crore. Some sectors are slowing, but there are others where there is additional demand,” Seth said.

Last year, the Centre had achieved nearly 95 per cent of the budgeted capex spend of ₹ 9.5 lakh crore. “This year also we will be around the same level,” he added. The Finance Ministry is quite hopeful to make up for the slowdown on account of the general elections in May this year. 

Food Prices A Problem

As far as inflation is concerned, food prices has been a problem area largely due to incessant rainfall this year. Other than food prices inflation is not a challenge, he added.

Seth declined to comment on interest rates as it is a monetary policy action and RBI is the right authority to look into this issue.

$1 trillion digital economy 

S Krishnan, Secretary, Ministry of Electronics & Information Technology (MeitY) said that India’s digital economy will hit $1-trillion mark by 2030. He noted that there is a strong demand for electronics in the country.

“With PLI on IT hardware kicking in, we expect domestic demand would be met. FDI pipeline continues to be strong. In electronics hardware manufacture, there is continuous interest,” he noted.

Defence sector 

Defence Secretary Rajesh Kumar Singh said that the domestic defence industry is at a significant inflexion point. The Defence Ministry intends to “double down” on indigenisation, he said, adding that there is no case for any disinvestment in the defence sector.

“We already have FDI automatic route for 74 per cent. So far, FDI worth ₹5,000 crore has come and more will come. Reform area for us is more in ease of doing business. Lot of Eodb (ease of doing business) issues need to be handled,” Singh added. 

He said that exports by Indian defence companies have grown 31 times in the last ten years.

“We need to invest in R&D to create IP and design in order to develop indigenous technologies and boost defence manufacturing,” Singh said.

Textiles sector

Textiles Secretary Rachna Shah said that textile sector, estimated at $170 billion, is expected to touch $350 billion by 2030. “We are now exporting about $38-40 billion (out of $170 billion). Our aim is to take our exports to $100 billion out of $350 billion by 2030,” she added.

The textile sector is also expected to gain from huge investments (domestic and foreign) expected in the coming years, she noted.