Indian Economy on Track for 6.5-7% Growth Despite Q1 Challenges

Chief Economic Advisor V Anantha Nageswaran stated that the Indian economy is expected to achieve a growth rate of 6.5-7% for the current fiscal year. Despite a slowdown in Q1 2023-24, caused primarily by reduced farm production, positive factors such as healthy monsoon, resilient rural consumption, and strong corporate and bank balance sheets bolster this growth outlook.

Chief Economic Advisor V Anantha Nageswaran announced on Friday that the Indian economy is on track to achieve a growth rate of 6.5-7% for the current fiscal year, despite the GDP growth rate dipping to a 15-month low of 6.7% in the April-June quarter.

Data released by NSO attributes the Q1 slowdown to a deceleration in farm production, which fell from 3.7% to 2%. However, Nageswaran emphasized that most regions experienced normal rainfall, and expects a rebound in agriculture and allied sectors' growth as the year progresses.

Nageswaran highlighted that a healthy monsoon, improved rural consumption, and strong corporate and bank balance sheets are crucial drivers of the expected economic growth. He also pointed out that inflation expectations remain moderate, though potential global financial market corrections could impact private consumption sentiment.

(With inputs from agencies.)