The Indian economy's "soft landing" has already happened, Chief Economic Adviser V Anantha Nageswaran has said, with the government's top economist bullish about the country's growth prospects.
Speaking to reporters on May 31 after the release of GDP data for January-March and 2022-23 – which blew expectations out of the water – Nageswaran expressed confidence in his above-consensus forecast for the current financial year and said the government was willing to "stick our neck out" and predicted an upward revision in the 2022-23 growth rate of 7.2 percent next year.
"We are prepared to stick our neck out one more time and say that the risks to 6.5 percent (GDP growth forecast for 2023-24) are probably more evenly balanced – that is, there is as good a chance that this number may be exceeded as there is a chance that the reality may undershoot this number," Nageswaran added.
In the 2022-23 Economic Survey, tabled in Parliament on January 31, Nageswaran had forecast a GDP growth rate of 6.5 percent for 2023-24, albeit in a range of 6-6.8 percent - indicating that risks to the forecast were tilted to the downside.
Since then, the Reserve Bank of India (RBI) has also made a minor upward revision to its growth forecast to 6.5 percent from 6.4 percent. Both the government and the RBI's projections for the current financial year are well above what private sector economists and multilateral agencies expect.
Nageswaran's bullishness about the Indian economy's growth prospects seemingly matches that of the Indian central bank. Last week, RBI Governor Shaktikanta Das had said that he wouldn't be surprised if the 2022-23 GDP growth number exceeded the statistics ministry's second advance estimate of 7 percent.
In his post-GDP data briefing on May 31, Nageswaran also expressed confidence about the domestic inflation trajectory, saying there is a very high chance that headline retail inflation will come close to the RBI's medium-term target of 4 percent in 2023-24.
As per data released on May 12, Consumer Price Index (CPI) inflation fell to an 18-month low of 4.70 percent in April, thanks to a favourable base effect.
The RBI expects CPI inflation to average 5.2 percent in 2023-24.
Nageswaran noted that while inflation did increase in early 2022-23 after a surge in commodity prices following Russia's invasion of Ukraine, the deviation of the inflation rate from the target was one of the lowest for India.
"The monetary policy tightening, therefore, didn't have to become extreme and that is what in a way paves the way for a 'soft landing' which has already happened and augurs well for growth prospects in the current financial year," he added.
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