According to V Anantha Nageswaran, the government's chief economic adviser, the economy is poised to achieve a growth rate exceeding 7% in the current fiscal year, accompanied by a favorable outlook on inflation.
Speaking at an event in New Delhi, Nageswaran expressed confidence in sustaining the current growth momentum, remarking, "The omens are good for us to continue the steady growth rate. We don't see, at the moment, the scope for nasty upside surprises (on inflation)."
The annual retail inflation rate, having declined to a five-month low of 4.85% in March, owes largely to a reduction in fuel prices.
Nageswaran also articulated optimism about the durability of the current growth trajectory over the next decade, sharing his views at a gathering hosted by the National Council of Applied Economic Research in New Delhi.
While acknowledging the potential for unforeseen events to impact inflation, particularly in geopolitics, Nageswaran suggested that the baseline scenario foresees a gradual alignment of inflation towards the midpoint of the target range.
He stated, "There can always be scenarios in geopolitics that can cause inflation to be more than we expect, but at this point, the baseline scenario is that inflation gradually converges to the mid-point of the target range."
The Reserve Bank of India maintains a target range of 2% to 6% for inflation, intending to achieve a rate of 4% before contemplating rate adjustments. Nageswaran emphasized that the Indian economy is now better positioned to attain "non-inflationary" growth.
Estimating that the economy expanded by 8% in the previous fiscal year ending on March 31, Nageswaran anticipates a growth rate of 7% for the current fiscal year commencing on April 1.
