India's economic growth likely to be better than IMF's projections next fiscal year, claims CEA

Image Source : PTI/REPRESENTATIVE India's Chief Economic Advisor claims the country's economic growth is likely to be better than IMF's projections next fiscal year

Highlights

The Chief Economic Advisor says enhanced capital formation would help India achieve better growth
The IMF projected real growth for India at 6.8% this year and 6.1% the following year
Nageswaran claims India's capital formation cycle will do better after one decade of retrenchment

India's economic growth: V Anantha Nageswaran, the Chief Economic Advisor (CEA) to the Government of India, on Monday claimed that the enhanced capital formation would help the country achieve better growth than the International Monetary Fund's (IMF's) projections for next year.

The UN financial agency recently predicted real growth for India at 6.8% this year and 6.1% the following year.

"In fact, I think the growth rates for the coming years may be slightly more, and better than what these numbers are. Because I think there is a possibility that India's capital formation cycle will do better after one decade of retrenchment," Nageswaran said.

'India's public digital infrastructure has almost reached a turning point': CEA

He also outlined that India's public digital infrastructure has likely reached a turning point, which will help the country's economy become more formalised and see higher growth. Therefore, he suggested that the baseline figures of 6% might receive an increment of 0.5% to 0.8%.

Additionally, he stated that monetary and fiscal policies typically work in harmony to balance each other. Speaking about the concerns related to the high debt-to-GDP ratio, Nageswaran stated that it is not sustainable and might even decline with asset monetisation.

"India can use asset monetisation proceeds to whittle down its debt and that will help improve the credit rating, that can be the best fiscal stimulus we can provide," the Chief Economic Advisor added.

Earlier this month, the IMF MD Kristalina Georgieva said India deserves to be called a bright spot on this otherwise dark horizon because it has been a fast-growing economy, even during these difficult times, but most importantly, this growth is underpinned by structural reforms.

(With inputs from agencies)