Outlook bright for India, says Chief Economic Adviser 

The country’s economic fundamentals are strong. By 2027-28, India is poised to become the third largest economy in terms of GDP (US$).

Chief Economic Adviser V. Anantha Nageswaran has said that the near- and medium-term outlook is bright for the country with a host of factors moving in favour of it.

The country’s economic fundamentals are strong. By 2027-28, India is poised to become the third largest economy in terms of GDP (US$). The growth has been from the 10th position in 2014 to sixth in 2019 and fifth in 2021, he said during an interactive session organised by ASSOCHAM, Kerala, here on Monday.

The positive factors included growth in consumption surpassing pre-pandemic trend, great outlook for agriculture with availability of fertilizers and seeds and 20% higher levels in reservoirs compared to the average for the past 10 years. Added to this is the sustained performance of the industry, uptick in construction activities, and growth in the services sector, he said.

The wages level will help boost rural consumption, and there is already a rise in consumption backed by better MSP for agricultural products. Urban growth indicators such as demand for passenger cars, new houses and credit card usage too are positive. Though goods exports looks a difficult area, the services segment holds out promise with India becoming the back office for a host of new areas of activities such as accounting, risk management, and compliance.

Mr. Nageswaran also said that inflation would moderate in FY24. The foreign currency reserve provides confidence with 10-month import cover even as the banking sector is well regulated and better capitalised. The hospitality industry employment figures have grown beyond the pre-pandemic level.

Digital transformation is an area to be factored in with the new development promising inclusion, formalisation, and financial expansion. Unemployment level has eased substantially, and net EPFO registration has grown. At the same time, India needs to work on improving the ease of doing business. It is a work in progress and an area to be addressed both by Union and State governments, he said.

The start-up ecosystem is healthy with the culture of innovations spreading to tier II and III cities. Start-ups are an additional growth-booster. However, a country like India cannot rest on its achievements but need to continue skilling, harnessing Artificial Intelligence and ensuring that the demographic dividend pays even as it works towards energy security with the climate factor high in mind.