V Anantha Nageswaran, Chief Economic Advisor, has expressed confidence that India will be able to achieve 6.5 per cent GDP growth in the remaining years of this decade, despite the headwinds and turbulence in the global economy.
The growth in the digital economy and investments would also enable the country to achieve an additional 0.5 to 1 per cent growth, he said while speaking at the industry interaction organised by the Assocham here on Monday.
The buoyancy in the rural economy has been exemplified by the growth in demand for two-wheelers and tractors, which is an indicator of the country’s growth story. However, he added that global factors are expected to hit the country’s exports and urged exporters to continue efforts to maintain and expand India’s market share in merchandise exports.
“Consumer price inflation is within the RBI target range of 2–6 per cent and is expected to moderate to around 4 per cent by the end of this fiscal,” he said.
Highlighting the positive performance of key sectors such as agriculture, industry, and services, he said the agriculture sector is well-positioned for growth, with strong food grain production, ample availability of seeds and fertilizers, and increased tractor sales.
The industry sector, as indicated by rising purchasing managers’ indices, construction activity, and steel and cement production, demonstrates confidence in expansion. Services exports have also performed well, contributing to India’s growing share of the global GDP.
Domestic demand
Regarding domestic demand, he said both urban and rural consumption indicators showed positive signs. Nageswaran pointed out the recent uptick in rural demand, attributing it to increased rural income, positive wage growth, and higher minimum support prices for farmers. He noted that urban consumption indicators, including passenger vehicle sales and new housing launches, indicate a positive trajectory for the overall economy.
He also highlighted India’s comfortable foreign exchange reserves and the declining current account deficit, supported by strong remittances and a narrowing trade deficit.
There are nearly 100,000 recognised start-ups, with over 43,000 led by women. Between 2018 and 2022, the CAGR of jobs created by startups was around 32 per cent, he said.