V. Anantha Nageswaran, India's Chief Economic Advisor (CEA) to the Finance Ministry, said on Thursday, 5th Nov. 2024, speaking at the ASSOCHAM, New Delhi summit, that what we have started to see is economic activity picking up pace in some of the lately during the Oct-Nov 2024 period, and looking at GDP growth of 6.5-7% or thereabouts, with a fair degree of confidence we see it as quite doable.
He also alluded to the fact that the 5.4% Q2 GDP growth estimate revision is very much on the table (validated by the RBI in its 6th Dec. 2024 meeting, which revised its FY25 economic growth projection downward to 6.6% in its 'RBI Monetary Policy Meeting' against its earlier projected growth to be 7.2% in the current fiscal greater than the 6.5-7% estimates in the finance ministry's Economic Survey) given that current estimates have not yet been seasonally adjusted to put it in the right perspective.
"I think there is no need to overreact to last quarter's GDP growth numbers of 5.4% from 6.7% in the April-June quarter of 2024, which is unfortunately a seven-quarter low. He further stressed it, stating that he doesn't think we should throw the baby out with the bathwater knowing that the underlying growth story remains very much intact as the health checkpoints on various parameters are robust," Nageswaran stated.
Nageswaran also underpinned the theme 'Spotlight on deregulation,' slated to be highlighted during the forthcoming "Economic Survey 2024-25," clearly intended to boost employment creation and also directed towards raising female workforce participation.
Fashion Guru
He also made a strong point that though the slowdown in GDP growth is unfortunate, it is not alarming and clearly could be on account of some "religious observances" in September 2024 and, more importantly, excessive monsoon rainfall, which is plausible and is not a structural slowdown. Again, it is entirely possible that the reasons could be other, more long-standing issues playing themselves out.
For the rationale's sake, the explanations could be from 'mundane to more serious ones'; he also emphasized that anyways it is the first estimate for Q2FY'25 GDP growth, and well, it could be revised higher so let us not read too much," he said.
He further iterated that, however, I have to state here that "the Economic Survey had projected 6.5-7% for FY25" and that is that. Again to drive the point home, he said a categorical remark that "To be able to clock a 6.5% GDP growth rate for the full year as such, we require hitting a 7% real GDP growth in the coming two quarters/H2, as it is two months (2) are already gone in the Q3FY'25.
Considering that we are in the third month of Q3 currently, I am pretty constructive on the annual growth numbers and confidently maintain that it is achievable, and we are still in the game, especially when we take a close look at some of these interesting specificities/pickups/datapoints that are emerging in specific areas and pockets, making it a sanguine case for the growth outcome in the range of 6.5-7% as a feasibility for FY25," Nageswaran stating straight given the Indian economy clocked an impressive 8.2% in FY24 to justify its claim of being one of the fastest growing economies in the world.