Growth prospects remain solid for next year, says CEA

The robust momentum in investments and consumption will "underpin solid growth prospects" for India in the coming year, chief economic adviser V Anantha Nageswaran said on Thursday, asserting that the country's growth outlook remains bright despite risks from external factors.

Briefing reporters after the gross domestic product data showed the economy grew as much as 7.8% in the June quarter, the CEA said high-frequency indicators for July signal a good start to the second quarter of FY24 as well.

India remained the world's fastest-growing major economy in the June quarter, ahead of China (6.3% growth), Indonesia (5.2%), Mexico (3.6%) and Japan and the US (2.1% each), he said.


Nageswaran cited data from various sources to point out that new investment projects announced by the private sector in the June quarter were the highest in 14 years.

"Private investment is not waiting to take off but it has already taken off," he said, stressing that the government's sustained capital expenditure push is crowding in private investments.

The government and the RBI are now very comfortable with the 6.5% economic growth projection firmed up for FY24, he added.

"The private sector capital formation, supported by the government's capex push, is underway and that's a big plus for economic growth, employment and income gains from households," he said.

Inflation outlook

Nageswaran allayed concerns that inflation could spike out of control or jeopardise the growth momentum, stating that both the fiscal and monetary authorities are taking measures to curb the price rise.

Moreover, core retail inflation hit a 39-month low in July and the surge in price pressure in food to 11.51% from 4.55% in June is "transitory", he suggested. However, the firming up of global Brent crude oil prices may warrant attention, he added.

The strong services sector will continue to remain robust in the coming quarters, the CEA indicated.