GDP growth forecast
India’s economy is currently growing at a strong pace and the government expects that the economic growth in the current financial year will be more than 6.8%. Chief Economic Advisor (CEA) V. Anantha Nageswaran said on Friday that consumption of people has increased due to reduction in GST rates and relief in income tax, which has a direct impact on growth.
The Economic Survey, which was tabled in Parliament in January, had projected GDP growth of 6.3% to 6.8% for FY26. However, now Nageswaran says that looking at the economic trends of recent months, he is quite confident about growth of more than 6.8%.
GDP will remain above 6.5%
According to Nageswaran, earlier there was concern that the growth might slip towards a lower level of 6%, but now the situation is looking much better. Growth will remain above 6.5% and there is a high possibility of going beyond 6.8%. Before putting the figure of 7%, we will have to see the figures of the second quarter.
India had registered 7.8% GDP growth in the first quarter of the current financial year. This growth came due to the strong performance of agriculture, trade, hotel, financial services and real estate sectors. In January-March 2024 also, GDP grew at the rate of 8.4%, which was the highest in recent years. India still remains the world’s fastest growing large economy, compared to China’s 5.2% growth.
India-US trade deal will boost GDP
CEA said that if the pending bilateral trade agreement (BTA) with the US is resolved, growth could accelerate further. At present, America has imposed a heavy tariff of up to 50% on Indian goods, which includes an additional duty of 25% on purchasing oil from Russia. This tariff is in effect since August and negotiations are going on between the two countries. Nageswaran says that as soon as this trade dispute is resolved, India’s economic growth projections will improve.